What will you discuss with the Senior on the engagement about the inventory valuation?
On January 2nd as an audit assistant at a local accounting firm, you are assigned to finish off the workpapers of an inventory audit observation that the accounting firm took part in on December 31st. The client is a retailer selling clothing, small appliances and other small electronic devices. The
While you are finishing up your inventory workpapers the Accounting Manager shared with you that the company is very careful to evaluate the NRV of its inventory at year-end to determine if any write-downs may be necessary. The company uses the lower-of cost or market method to report the value of its FIFO inventory. You are scheduled to have a final meeting with the senior on the engagement to discuss the inventory audit. You document your conversation with the Accounting Manager in the workpapers and you meet with the Senior on the engagement. What will you discuss with the Senior on the engagement about the
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