In which of the following situations would the auditor most likely issue an unqualified report?
A)The client valued ending inventory by using the replacement cost method.
B)The client valued ending inventory by using the Next-In-First-Out (NIFO)method.
C)The client valued ending inventory at selling price rather than historical cost.
D)The client valued ending inventory by using the First-In-First-Out (FIFO)method, but showed the replacement cost of inventory in the Notes to the Financial Statements.

Question

Quizplus · Accepted Answer

The use of the FIFO method for valuing inventory is generally accepted and appropriate. Additionally, the disclosure of the replacement cost of inventory in the Notes to the Financial Statements provides transparency and further information to users of the financial statements. Therefore, the auditor would issue an unqualified report.

In Which of the Following Situations Would the Auditor Most