Audit risk

This topic has 1 reply, 2 voices, and was last updated 7 years ago by Ken Garrett.

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July 21, 2018 at 7:08 pm #464174
saif02bd
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- Topics: 52
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1) inventory at third party warehouse:
Audit risk : There is a risk that inventory is overstated,because inventory may be damaged and should be valued at lower of cost or NRV.
2)long term loan received:
Audit risk: There is a risk that non current liability is overstated,because of missclassification of the portion payble within 12 months should be STL and the remaining portion is long term liabilities.
sir, please tell me am I explaining the audit risk properly to get the full marks?
Thanks in advance..
July 22, 2018 at 10:00 am #464210
Ken Garrett
Keymaster
- Topics: 10
- Replies: 10651
1 Yes, but there is also a risk that inventory has not been recorded correctly eg sold by the third party but not reflected in the records.
2 Yes, the presentation could be incorrect. Also there is a risk that interest is not accrued.
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