Question 1

An auditor is unable to observe the counting of physical inventory at the beginning of the year. The auditor was able to observe the year-end count and is satisfied with the ending balance. However, the auditor cannot verify the opening inventory balance by alternative procedures. Which opinion is most appropriate for the Statement of Income?

Accepted Answer

Scope Limitation (Can't verify Opening Inv). Affects Income Statement (COGS). Pervasive? Yes. Result = Disclaimer.

Question 2

What mistakes do candidates make on this CPA question?

Accepted Answer

Giving a Qualified opinion (often considered pervasive) or Unmodified.

How to approach this question

Full Answer

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