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aUDIT RISK

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › aUDIT RISK

  • This topic has 3 replies, 2 voices, and was last updated 8 years ago by Ken Garrett.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • October 22, 2016 at 6:35 am #345530
    anu1234
    Member
    • Topics: 78
    • Replies: 65
    • ☆☆

    There have been a significant number of sales returns made subsequent to the year end.

    In the auditors response :, the reason for the increased level of returns should be discussed with management. This will help to assess if there are underlying issues with the net realizable value of inventory.

    What possibly can be the issues with nrv if there are sales returns ?

    October 22, 2016 at 7:41 am #345534
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10597
    • ☆☆☆☆☆

    Faulty inventory.

    October 22, 2016 at 10:34 am #345557
    anu1234
    Member
    • Topics: 78
    • Replies: 65
    • ☆☆

    so it should be valued at nrv right

    October 22, 2016 at 5:54 pm #345611
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10597
    • ☆☆☆☆☆

    All inventory should be valued at the lower of cost and nrv. Depending on how faulty the goods are, the nrv could eb above or below cost.

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