Which of the following is a major factor in management's ability to overvalue inventory without rapid detection by auditors?
A)The limited volume of transactions in the inventory accounts.
B)The auditor's assessment of inventory as a low-risk area.
C)Complexity in the valuation of inventory.
D)Consideration by the auditor of non-financial indicators of inventory fraud.

Question

Quizplus · Accepted Answer

Complexity in the valuation of inventory can make it easier for management to manipulate inventory values without being easily detected by auditors. This is because complex valuation methods may require more judgment and estimation, allowing management to use their discretion to overvalue inventory. Additionally, the complexity may make it more difficult for auditors to fully understand the inventory valuation process and identify any potential misstatements.

Which of the Following Is a Major Factor in Management's