Ask Joey ™ a Question

How to assess whether the company’s inventory is obsolete?

This audit procedure is very difficult and is usually quite specific to your client. For example, if you are auditing a company that sells luxury items, one way you could test inventory obsolescence is see many times the item has sold in the last 12 months.

If the company has 100 pairs of name brand sunglasses in inventory, but there hasn’t been a single sale in the last 12 months, perhaps that item has gone out of style and should be considered obsolete by the company.


You might also be interested in...

  • July 2021 Changes to The CPA Exam: Everything You Need to Know

    Change is right around the corner! The talk of the (CPA) town is that changes are upon us and they are coming quickly. While this is not an overhaul in the way that CPA evolution will be in 2024, there are changes that are being made to all four sections (FAR, REG, AUD, and BEC) […]

  • 2021 AICPA Released Questions

    Buckle up and get ready to crush the CPA exam! The AICPA has released additional multiple choice questions for BEC, AUD, REG, and FAR. We’re beginning to incorporate the questions into the Universal CPA Review platform and we will be uploading videos for certain questions to each of the respective pages below. Creating a high […]

  • AICPA 2021 Released Questions for BEC

    The moment we’ve all been waiting for! Additional question have been released by the AICPA for BEC! The topics are very random, so its a good way to test your understanding if you have been studying. If you haven’t been studying for BEC, it is a great way to see what you will be touching […]