Which of the following situations would most likely require special audit planning?
A)Some items of factory and office equipment do not bear identification numbers.
B)Depreciation methods used on the client's tax return differ from those used on the books.
C)Assets costing less than $500 are expensed even though the expected life exceeds one year.
D)Inventory is comprised of precious stones.

Question

Quizplus · Accepted Answer

Inventory consisting of precious stones is a specialized area that requires special audit planning due to its high value and unique characteristics. The auditor would need to ensure proper valuation, existence, and accuracy of inventory counting. The other options may require some planning, but they do not involve as much specialized knowledge or procedures as the auditing of precious stones.

Which of the Following Situations Would Most Likely Require Special