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Problem 1: As part of the audit of valuation, the auditor is conducting pricing tests by comparing to supplier invoices. The auditor is making sure that, for each item tested, sufficient supplier invoices are examined to cover the quantity of inventory that was on hand during the physical inventory count. What type of pricing error could this detect?
A) The client valued their inventory on the basis of the most recent invoice only.
B) The client has used the incorrect accounting method to value its inventory.
C) Extension errors could occur with numerous different inventory items.
D) The wrong inventory count quantity could have been recorded on the count sheets.
Problem 2: Which is the only class of transaction relating to the payroll cycle?
A) receiving of goods
B) obtaining of service
C) receipt of cash
D) sales
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