During the most recent year's audit of Pillco Corporation, the auditors have once again noted that inventory turnover is considerably slower than the industry average. Which of the following should the auditors consider doing to address this issue? O The auditors should consider issuing a qualified opinion on the client's inventory accounts in order to draw attention to this issue. O The auditors should consider making reference to this in the management representation letter, to ensure client management is appropriately aware of this issue. O The auditors should consider requesting the client formulate note disclosure in the financial statements, specifically addressing this issue. O None of these answer choices are correct.

During the most recent year's audit of Pillco Corporation, the auditors have once again noted that inventory turnover is considerably slower than the industry average. Which of the following should the auditors consider doing to address this issue? O The auditors should consider issuing a qualified opinion on the client's inventory accounts in order to draw attention to this issue. O The auditors should consider making reference to this in the management representation letter, to ensure client management is appropriately aware of this issue. O The auditors should consider requesting the client formulate note disclosure in the financial statements, specifically addressing this issue. O None of these answer choices are correct.

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 most recent year's audit of Pillco Corporation, the auditors have once again noted that inventory turnover is considerably
slower than the industry average. Which of the following should the auditors consider doing to address this issue?
O The auditors should consider issuing a qualified opinion on the client's inventory accounts in order to draw attention to this
issue.
O The auditors should consider making reference to this in the management representation letter, to ensure client
management is appropriately aware of this issue.
O The auditors should consider requesting the client formulate note disclosure in the financial statements, specifically
addressing this issue.
O None of these answer choices are correct.

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