Inventory is a complex area to audit for all except which of the following reasons?
A) Inventory is often in different locations.
B) There are several acceptable valuation methods and some entities use different methods for different types of inventory.
C) Inventory is often the largest account on the balance sheet.
D) Inventory valuation includes few estimates.

Question

Quizplus · Accepted Answer

Inventory valuation includes several estimates such as cost of production, overheads, and market value, which make it a complex area to audit. Choices A, B, and C are all factors that contribute to the complexity of inventory auditing.

Inventory Is a Complex Area to Audit for All Except