Answered step by step
Verified Expert Solution
Question
1 Approved Answer
During the audit of Rogers Enterprises, Inc., a regional supplier of perfumes to luxury department stores, a discrepancy has been noted by an audit staff
During the audit of Rogers Enterprises, Inc., a regional supplier of perfumes to luxury department stores, a discrepancy has been noted by an audit staff associate working on the inventory accounts. In particular, there is a significant discrepancy between the inventory listed in the client's general ledger and the physical inventory count, which revealed significantly less inventory. Which of the following choices represents the most appropriate next step by the auditor to this finding? The auditor should disclaim an opinion on the client's inventory accounts, in order to protect the reputation and standing of the audit firm. The auditor should consider the possibility of fraud or error and investigate accordingly, attempting to uncover the reasons for the discrepancy. The auditor should work on the premise that the discrepancy is an error, and propose correcting entries to adjust the inventory accounts accordingly. The auditor should presume that fraud is occurring, and interview all staff members working in this department to uncover the perpetrator
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started