For Which of the Following Judgments May an Independent Auditor

question 4

Multiple Choice

For which of the following judgments may an independent auditor share responsibility with an entity's internal auditor who is assessed to be both competent and objective?

• A)Assessment of inherent risk, yes; assessment of control risk, yes.
• B)Assessment of inherent risk, yes; assessment of control risk, no.
• C)Assessment of inherent risk, no; assessment of control risk, yes.
• D)Assessment of inherent risk, no; assessment of control risk, no.

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Definitions:

Ending Inventory

The financial value of items up for sale at the end of a fiscal period.

Lower of Cost or Market

An accounting principle requiring companies to value and report their inventory at the lower of the original cost or its current market price.

Inventory Item

An individual product or article that is held in stock by a business for the purpose of resale or production.

Inventory Value

The total cost or market value of all the goods held by a company meant for sale.