The auditor need not be concerned about inventory being classified and disclosed, properly, into finished goods, work-in-process and raw materials (separately) in the financial statements; this is management's responsibility, only.

Question

Quizplus · Accepted Answer

While it is management's responsibility to properly classify and disclose inventory in the financial statements, the auditor should still be concerned about it, as inventory misstatements can have a significant impact on the financial statements. Therefore, the auditor should assess the appropriateness and accuracy of the inventory classification and disclosure.

The Auditor Need Not Be Concerned About Inventory Being Classified