An auditor is interested in the clients inventory turnover ratio because it helps the auditor understand: (a)

Question:

An auditor is interested in the client’s inventory turnover ratio because it helps the auditor understand:

(a) If the industry is the same as another industry.

(b) If the client is as competitive and has as high a turnover as the industry average.

(d) If the client is in the right industry.

Inventory Turnover Ratio
Inventory Turnover RatioThe inventory turnover ratio is a ratio of cost of goods sold to its average inventory. It is measured in times with respect to the cost of goods sold in a year normally. Inventory Turnover Ratio FormulaWhere,... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...

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