The AICPA's Practice Alert No

question 40

Multiple Choice

The AICPA's Practice Alert No. 94-2: Auditing Inventories-Physical Observations describes several circumstances that constitute inventory fraud. Which of the following is not an example of inventory fraud?

• A) including items in inventory when the corresponding payable has not been recorded
• B) adjusting inventory to lower-of-cost-or-market
• C) increasing counts for items that auditors did not test count
• D) counting obsolete inventory as salable or usable

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Definitions:

New-onset

Referring to the initial occurrence or diagnosis of a disease or condition.

New Cases

Instances or occurrences that have been identified or reported for the first time during a specific period.

Neurocognitive Disorder

A group of conditions that occur when the brain's cognitive functions are impaired; includes diseases such as Alzheimer's and other dementias.

DSM-5

The Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, a comprehensive classification of officially recognized psychiatric disorders, used by mental health professionals in the U.S.