Auditing the Valuation Assertion for Inventory of a Client Utilizing

question 20

Multiple Choice

Auditing the valuation assertion for inventory of a client utilizing the FIFO cost flow assumption will require the auditor to examine

• A)invoices representing the more recent purchases of inventory.
• B)invoices representing the purchase of base year inventory in the year of inception.
• C)shipping documents for a sample of cost of goods sold transactions during the year.
• D)shipping documents for a sample of units on hand in the interim period.

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Definitions:

Proficiency

The state or quality of being skilled or competent in a particular activity or field.

Work Flow Design

A method for optimizing the sequence of tasks and activities to enhance efficiency and effectiveness in business processes.

Aggregate

A total or sum made up from individual parts, often used in the context of statistical analysis, data collection, or information synthesis.

Duties

Responsibilities or tasks one is required to perform as part of a job or role.