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L20 Notes_Part_14 - prices would be increased 10 percent On...

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GAAP Departures Is the departure material? Is the departure justified? Can it be “compartmentalized”? Qualified Report Rule 203 Report Adverse Report No GAAP departure identified Standard Report No Yes Yes No Yes Unreasonable estimate Unacceptable actg method Inappropriate application of GAAP Missing or misstated footnote
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Audit Reporting Problem On January 2, 2000, the Retail Auto Parts Company received a notice from its primary supplier that effective immediately all wholesale
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Unformatted text preview: prices would be increased 10 percent. On the basis of the notice, Retail Auto Parts revalued its December 31, 1999, inventory to reflect the higher costs. The inventory constituted a material proportion of total assets; however, the effect of the revaluation was material to current assets but not to total assets or net income. The increase in valuation is adequately disclosed in the footnotes....
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L20 Notes_Part_14 - prices would be increased 10 percent On...

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