What are the factors that increase inherent risks for the accounts within the inventory cycle?

Question

Quizplus · Accepted Answer

The Answer is Factors that increase inherent risks for the accounts within the inventory cycle are:1)Inventory is often stored in different locations,which makes physical control and counting difficult.
2)Inventory is easily transportable,is easy to steal,and may be hard to access.
3)Inventory that consists of items such as jewels,chemicals,and electronic parts is often difficult for the auditor to observe and value.In these circumstances,the auditor may need specialist assistance for both counting and valuation.
4)The industry is categorized by rapid and significant technological innovation,which increases the risk of obsolescence.
5)Customer returns are frequent,which causes accuracy,timing,and cutoff issues with recording of the physical return and the corresponding credit in sales.Poor quality client return processes will result in the need for increased audit tests.
6)There are several acceptable inventory valuation methods under ASPE and IFRS,which the auditor must determine have been applied consistently from year to year.

What Are the Factors That Increase Inherent Risks for the Accounts