[Solved] Auditor finds that there is change in the method of valuation of stock whether he should

Auditor finds that there is change in the method of valuation of stock whether he should

a) Allow it

b) Disallow it

c) Allow it with a note to this effect

d) None of the above

Answer: (c) Auditor finds that there is change in the method of valuation of stock whether he should allow it with a note to this effect. The auditor should verify whether the items of incomes received in advance are recorded in books. The auditor should obtain a Certified Schedule of income received in advance and verify the same. He should ensure that income received in advance is fully shown in the liability side of the Balance Sheet.

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