1. An inherent risk that management is more likely to overstate inventory should be considered by the auditor.

True

False

2.Sini Inc. purchased receivables from Casto Inc. in June 2018. In June 2019, Casto Inc. agreed to purchase the receivables back from Sini Inc. The auditor is responsible for maintaining policies and procedures to account for this transaction.

True

False

3.In the event there are no material violation of generally accepted auditing principles, the audit will issue an unqualified report.

True

False

4.A possible inventory fraud scheme is the unintentional omission of cost of goods sold when inventory is sold.

True

False

5.Performing a complete inventory of BYOD Corporations global manufacturing equipment is an example of a test of control.

True

False