(i)The inventory costing $ 150,000 being ordered by customers before the year end was excluded from the ending inventory balance as they are set aside for delivery after year end. The ending balance of inventory as on the statement of financial position was $ 600,000. (ii) Inventory list shows 40 boxes of rice but only 38 boxes were found in the warehouse. (iii) The inventory has a cost of $600,000 and realizable value of $540,000 as the items are outdated. The ending balance of inventory as on the statement of financial position was $ 600,000. Q: Suggest a possible kind of evidence the auditor may use to detect each of the misstatements in(i)-(iii). (Different evidence should be suggested for each misstatement.) Describe how that evidence can help the auditor detect the misstatement.
(i)The inventory costing $ 150,000 being ordered by customers before the year end was excluded from the ending inventory balance as they are set aside for delivery after year end. The ending balance of inventory as on the
(ii) Inventory list shows 40 boxes of rice but only 38 boxes were found in the warehouse.
(iii) The inventory has a cost of $600,000 and realizable value of $540,000 as the items are outdated. The ending balance of inventory as on the statement of financial position was $ 600,000.
Q:
Suggest a possible kind of evidence the auditor may use to detect each of the misstatements in(i)-(iii). (Different evidence should be suggested for each misstatement.) Describe how that evidence can help the auditor detect the misstatement.
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