A Client Maintains Perpetual Inventory Records in Both Quantities and Dollars.If

question 60

Multiple Choice

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

• A)insist that the client perform physical counts of inventory items several times during the year
• B)apply gross profit tests to ascertain the reasonableness of the physical counts
• C)increase the extent of tests of controls of the inventory cycle
• D)ask the client to schedule the physical inventory count at the end of the year and with a large number of test counts

---

Definitions:

Opportunity

A favorable situation or condition that offers the prospect of a benefit, advantage, or solution to a problem.

SWOT Analysis

A strategic planning tool that identifies Strengths, Weaknesses, Opportunities, and Threats related to business competition or project planning.

Contingency Planning

The process of preparing for unforeseen events or emergencies by developing strategies in advance to handle and mitigate risks.

Market Penetration Strategy

A business approach aimed at increasing market share for an existing product, or promoting a new product, through aggressive marketing and sales tactics.