In Order for an Auditor to Test Valuation of a Client's

question 51

Multiple Choice

In order for an auditor to test valuation of a client's inventories, each of the following substantive tests of details of account balances are appropriate except:

• A) using computer-assisted auditing techniques, reperform calculations testing the mathematical accuracy of report extensions and batch aggregations.
• B) reperform calculations supporting decisions about inventory write-downs or write-offs.
• C) obtain documentation supporting amounts of obsolete or slow-moving inventory items.
• D) evaluate any changes made to the client's impairment policies in light of engineering and production information or other underlying assumptions.

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Definitions:

Compounded Semi-annually

Interest calculation method where the invested sum earns interest twice a year, and this interest is added to the principal for the computation of future interest.

Semi-annual Deposits

Deposits that are made twice a year into a financial account.

Retirement Fund

Financial resources that have been saved or accumulated to support a person's living expenses after they cease working.

Compounded Annually

Interest calculation method where the profit earned is added to the principal annually, enhancing the subsequent year's earnings.