Auditing and Assurance Services 1st Edition by Iris Stuart

Exercise 8

Inventory adjustments. During your audit of the inventory account, you notice several adjustments made to the inventory account at the year-end.
a. Identify several questions that you should ask of management regarding the entries.
b. Describe three possible scenarios to explain the entries that involve adjustments associated with error corrections.
c. Describe three possible scenarios to explain the entries that involve fraudulent entries.