When performing price tests for purchased inventory, the auditor would not be concerned with the most recent vendors' invoices if the client uses the FIFO valuation method.

Question

Quizplus · Accepted Answer

When performing price tests for purchased inventory, the auditor should be concerned with the most recent vendors' invoices regardless of the valuation method used by the client. This is because the most recent purchases are most likely to reflect the current market price for the inventory. However, if the client uses the FIFO valuation method, the auditor may need to adjust the unit cost of the inventory based on the price of the most recent purchases, even if those purchases are not reflected in the inventory cost calculation.

When Performing Price Tests for Purchased Inventory, the Auditor Would