Matters That Should Be Considered by the Auditor Before Reaching

question 26

Multiple Choice

Matters that should be considered by the auditor before reaching a conclusion about the reliability of an inventory count include all of the following except:

• A) the type of accounting package used by the firm.
• B) the general condition of the inventory.
• C) departures from the entity's inventory count.
• D) all of the above should be considered

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Definitions:

Conventional Cash Flow

A pattern of cash flow over time where an initial outlay is followed by a series of positive cash inflows.

Cash Flows

The entirety of cash and cash-equivalent assets being moved into and exiting a company.

Present Value

The valuation today of an asset or cash flow that is received in the future, taking into account a specific interest rate.

Net Present Value Profile

A graphical representation of the relationship between an investment’s Net Present Values and various discount rates.