Audit Planning Requires That the Auditor Consider Possible Inventory Errors

question 13

Essay

Audit planning requires that the auditor consider possible inventory errors or frauds that might occur that could affect the financial statements.For each of the types of inventory errors listed in the following table,indicate what would be the possible effect in the inventory and cost of sales accounts: overstated,understated,or no effect.

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Definitions:

James-Lange Theory

The James-Lange Theory proposes that emotion is the experience of physiological responses to external stimuli, suggesting that we feel sad because we cry, angry because we strike, and afraid because we tremble.

Two-Factor Theory

A psychological theory that proposes that human emotions are composed of two factors: physiological arousal and cognitive label.

Cannon-Bard Theory

A theory in psychology that suggests emotions and physiological responses such as heart rate increase occur simultaneously.

Guilty Knowledge Test

A psychological assessment used in criminal investigations that measures physiological responses to determine whether the subject knows details about a crime.