Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hovington, CPA, knows that while audit objectives relating to inventories may be stated in terms of the assertions as presented in this chapter, they also

Hovington, CPA, knows that while audit objectives relating to inventories may be stated in terms of the assertions as presented in this chapter, they also may be subdivided and stated more specifically. He has chosen to do so and has prepared the second column of the following table. LO 12-3, 5, 6 Required: LO 12-3, 5, 6 LO 12-3, 5, 6 Required: LO 12-2, 6 Required: In-Class Team Case LO 12-1, 2, 6 Financial Statement Assertion Specific Audit Objective Audit Procedure

1. The entity has legal title to inventories.

2. Recorded inventory quantities include all products on hand.

3. Inventories are reduced, when appropriate, to replacement cost or net realizable value.

4. Cost of inventories is properly calculated.

5. The major categories of inventories and their basis of valuation are adequately reported in the financial statements.

Assume that Hovingtons client, a retail department store, does no production. For each specific inventory audit objective listed above, select the most closely related financial statement assertion and the most appropriate audit procedure from the following:

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles Of Auditing And Other Assurance Services

Authors: Ray Whittington, Kurt Pany

17th Edition

0077304454, 978-0077304454

More Books

Students also viewed these Accounting questions

Question

Describe how to train managers to coach employees. page 404

Answered: 1 week ago

Question

Discuss the steps in the development planning process. page 381

Answered: 1 week ago