Which of these factors contributes least to the risk of misstatement of inventories?
A) the volume of transactions
B) location at a large single site
C) vulnerability to spoilage or damage
D) All of the above factors listed contribute equally to the risk of misstatement of inventories.

Question

Quizplus · Accepted Answer

Location at a large single site may not necessarily contribute significantly to the risk of misstatement of inventories as long as proper internal controls are in place. The other factors listed (volume of transactions and vulnerability to spoilage or damage) have a direct impact on the accuracy and completeness of inventory records and therefore contribute more significantly to the risk of misstatement.

Which of These Factors Contributes Least to the Risk of Misstatement