Assume you are the auditor of Port West Trading Limited. Management provides you with a series of explanations for the 2016 financial results. Which of the following explanations might not be valid for the inventory to increase from 2015 to 2016?
Select one:
a. The anticipation of a large sales order after balance date.
b. Insufficient allowance for out-of-date inventory.
c. Poor inventory count or cut-off procedures at year end.
d. The anticipation of a future price rise in raw materials.
Answer & Explanation
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