Description
A. define and completely describe the effect that each of the following have on the audit of inventory:
a. FOB
b. Consignment.
B. Why is knowledge/ understanding of an audit client's industry important when auditing inventory? Be specific and include example.
Explanation & Answer
Attached.
a. FOB – it is an accounting terminology which explains who is responsible for the cost of the
transportation of the purchased goods. It also explains the legal responsibility of the parties.
Through the terms specified by FOB, the location at which each party takes responsibility is
specified. For example, FOB destination means that th...
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