An Entity Maintains Perpetual Inventory Records in Both Quantities and Dollars.If

question 15

Multiple Choice

An entity maintains perpetual inventory records in both quantities and dollars.If the assessed level of control risk is high,an auditor would probably

• A) increase the extent of tests of controls for the inventory cycle.
• B) request that the entity schedule the physical inventory count at the end of the year.
• C) insist that the entity perform physical counts of inventory items several times during the year.
• D) apply gross profit tests to ascertain the reasonableness of the physical counts.

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Definitions:

80/20 Rule

The 80/20 rule, also known as the Pareto Principle, is a concept suggesting that 80% of outcomes result from 20% of all causes for any given event.

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Interruptions Log

A record or diary maintained to track and analyze interruptions in work or activity, assisting in time management and productivity enhancement.

Achieving Goals

The process of setting targets and taking the necessary steps to attain the desired outcomes.