Increasingly, the PCAOB Is Expecting Auditors to Understand How IT

question 39

True/False

Increasingly, the PCAOB is expecting auditors to understand how IT affects the audit and integrating IT into the audit.

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Definitions:

Retail Method

An accounting method to estimate ending inventory and cost of goods sold by using a proportional relationship between the retail value and cost of goods.

Estimated Ending Inventory

An approximation of the value of inventory a company has on hand at the end of an accounting period.

Gross Profit Rate

A financial metric that represents the proportion of money left over from revenues after accounting for the cost of goods sold.

Retail Inventory Method

An accounting technique for estimating inventory value by using a proportion between the retail price and cost of goods.