Inventory is a complex area to audit for all but 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 involves several estimates, such as determining the cost of goods sold, assessing the net realizable value, and identifying slow-moving or obsolete inventory. Thus, inventory is a complex area to audit for reasons other than the absence of estimates.

Inventory Is a Complex Area to Audit for All but Which