Why is Inventory so easy to inflate without auditor detection? In other words, why is the...
Why is Inventory so easy to inflate without auditor detection? In other words, why is the invertory reported in a company's financial statements (balance sheet, statement of retained earnings, etc) so easy to manipulate without being detected by auditors?
Homework Answers
Valuation of the inventory constitute various management estimates which cannot be judge since it solely depend upon the company itself and differ company to company . Management estimates involve in determining valuation methods.
Since it is not possible for the auditor to judge the management estimates and to verify all the inventory physically . So it can be manipulated without being detected by auditor.
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May I know why the year 1 effects of the inventory on balance sheet is overstate?...
May I know why the year 1 effects of the inventory on balance
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It sounds that since the price is higher, then the ending
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What's more, I am also confused for the other parts.
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Refer to Exhibit 15.3 and the Why It Matters feature Differing
Guidance on Referring to Other Auditors. How do the requirements
for referring to other auditors differ between U.S. auditing
standards and the ISAs?
Exhibit 15.3 Example of an Excerpt from an Unqualified Audit Report with Explanatory Language Indicating the Division of Responsibility and Making a Reference to the Other Auditors: PCAOB Audit NOTE: The format of the audit report depends on the auditing standards the auditor is following. Opinion...
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What is the meaning of independence from the perspective of the
government auditor and why is independence so important? See the
article below to answer the question.
Independence The standard of independence covers both independence of mind and independence in appearance. Independence of mind concerns the state of mind that permits the auditor to audit without being affected by influences that may compromise professional judgment, thereby allowing the auditor to act with integrity, objectivity and professional skepticism. Independence in appearance...
May I know why the year 1 effects of the inventory on balance
sheet is overstate?
It sounds that since the price is higher, then the ending
inventory should be less than the correct.
What's more, I am also confused for the other parts.
Situation Klaus Corporation had $580,000 in inventory, which was based on a physical count at December 31, year 1. The inventory was priced at cost. In February year 2, it was determined that the inventory cost...
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