During the preliminary analytical review, the auditor discovered that the auditee forecast sales of 10,000 units but only 5,000 were sold. The auditors should consider performing a careful lower-of-cost-or-market valuation of the year-end inventory.

Question

Quizplus · Accepted Answer

Since sales did not match the auditee's forecast, there is a possibility that the inventory may be overvalued. Therefore, performing a lower-of-cost-or-market valuation would be appropriate.

During the Preliminary Analytical Review, the Auditor Discovered That the Auditee