choices would most likely represent a prudent course of action by the auditor? The auditor is most likely to simply disclaim an opinion on the client's inventory and any related accounts, as this area represents higher audit risk. ● The auditor may decide to audit the inventory accounts closer to the balance sheet date, and extend the extent of procedures performed on these accounts. O The auditor is likely to adopt a reliance on controls strategy, and perform less substantive procedures accordingly. O The auditor is likely to perform procedures on these accounts closer to the beginning of the audit, to allow more time to fix any problems uncovered.

choices would most likely represent a prudent course of action by the auditor? The auditor is most likely to simply disclaim an opinion on the client's inventory and any related accounts, as this area represents higher audit risk. ● The auditor may decide to audit the inventory accounts closer to the balance sheet date, and extend the extent of procedures performed on these accounts. O The auditor is likely to adopt a reliance on controls strategy, and perform less substantive procedures accordingly. O The auditor is likely to perform procedures on these accounts closer to the beginning of the audit, to allow more time to fix any problems uncovered.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

During the audit of Sunrise Enterprises, LLC, a provider of plastic utensils and other items to
restaurants throughout the southeastern United States, the auditors have determined that the
client's inventory represents an area of higher inherent risk. As a result, which of the following
choices would most likely represent a prudent course of action by the auditor?
O The auditor is most likely to simply disclaim an opinion on the client's inventory and any related accounts,
as this area represents higher audit risk.
The auditor may decide to audit the inventory accounts closer to the balance sheet date, and extend the
extent of procedures performed on these accounts.
O The auditor is likely to adopt a reliance on controls strategy, and perform less substantive procedures
accordingly.
O The auditor is likely to perform procedures on these accounts closer to the beginning of the audit, to allow
more time to fix any problems uncovered.

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