McKesson & Robbins Company is a well-known audit case involving auditor responsibility. What occurred at the McKesson & Robbins Company to change the way in which auditors audit inventory?
A) The company recorded nonexistent inventory.
B) The auditor did not perform any audit tests of the inventory.
C) The auditor and company colluded to overstate inventory balances.
D) The company counted inventory three months prior to year-end.

Question

Quizplus · Accepted Answer

The McKesson & Robbins Company recorded nonexistent inventory, which resulted in a significant financial statement misstatement. This case led to changes in auditing standards regarding the auditing of inventory, including the requirement for auditors to physically observe and test inventory quantities.

McKesson & Robbins Company Is a Well-Known Audit Case Involving