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IIA Exam IIA-CIA-Part3-3P Topic 12 Question 27 Discussion

Actual exam question for IIA's IIA-CIA-Part3-3P exam
Question #: 27
Topic #: 12
[All IIA-CIA-Part3-3P Questions]

During an audit of the organization's annual financial statements, the internal auditor notes that the current cost of goods sold percentage is substantially higher than in prior years. Which of the following is the most likely explanation for this increase?

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Suggested Answer: B

by Belen at Jul 07, 2023, 11:56 PM

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Sabina
2 months ago
You know, this reminds me of that time when I had to audit the company's financial statements and found a typo in the cost of raw materials. Good times!
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Refugia
3 months ago
I'm leaning towards B. If the labor productivity to produce goods is increasing, that could also result in a higher cost of goods sold percentage.
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Shelia
1 months ago
User 3: Maybe the write-off of inventory is also a factor. It could be contributing to the higher percentage.
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Tuyet
2 months ago
User 2: I agree. It's possible that the increase in cost of goods sold is due to improved productivity.
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Leslee
2 months ago
User 1: I think B makes sense. A more efficient manufacturing process could lead to higher costs.
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Lavonda
3 months ago
Haha, I bet the auditor is having a field day with this one. I'd go with option D, the good old inventory write-off. Classic!
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Tenesha
1 months ago
I agree. It's a red flag for the auditor, but it's also an opportunity for the company to improve their inventory management.
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Laurel
1 months ago
Yeah, it's a common issue in many organizations. It's important to keep track of inventory accurately.
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Theron
2 months ago
I think option D makes sense. Inventory write-offs can definitely impact the cost of goods sold.
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Lorrie
3 months ago
Hmm, I'm not so sure. What if the process to manufacture goods is actually more efficient? That could also explain the increase in cost of goods sold.
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Huey
1 months ago
User 4: Cost of raw material inventory items decreasing could also be a factor.
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Pamela
1 months ago
User 3: Maybe the write-off of inventory is increasing.
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Joni
1 months ago
User 2: But what about the labor productivity to produce goods increasing?
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Paris
1 months ago
User 1: I think the process to manufacture goods is more efficient.
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Gracia
1 months ago
User 4: Write-off of inventory increasing might be causing the higher cost of goods sold.
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Meghan
2 months ago
User 3: Labor productivity to produce goods increasing could also be a factor.
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Merilyn
2 months ago
User 2: Maybe, but what if the process to manufacture goods is more efficient?
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Elli
2 months ago
User 1: I think the cost of raw material inventory items decreasing could be the reason.
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Laura
3 months ago
I'm not sure, but I think D) Write-off of inventory is increasing could also be a possible explanation for the increase in cost of goods sold.
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Vi
3 months ago
I agree with Ashton, because if the process is more efficient, it would lower the cost of goods sold.
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Ashton
3 months ago
I think the answer is B) Process to manufacture goods is more efficient.
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Pok
3 months ago
I think the answer is D. Increasing write-offs of inventory would definitely lead to a higher cost of goods sold percentage.
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Jovita
2 months ago
I still think the most likely explanation is the increasing write-off of inventory. It seems like the most direct cause.
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Lorriane
2 months ago
But what about the possibility of the process to manufacture goods being more efficient? That could also lead to a higher cost of goods sold percentage.
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Hillary
2 months ago
That's a good point, it could definitely contribute to the increase in the cost of goods sold percentage.
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Lorriane
2 months ago
I agree, increasing write-offs of inventory would definitely impact the cost of goods sold percentage.
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Jacquelyne
2 months ago
But what if the cost of raw material inventory items is decreasing? Could that also be a factor?
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Kristel
2 months ago
I agree, increasing write-offs of inventory would definitely impact the cost of goods sold percentage.
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Fairy
3 months ago
I disagree, I think the answer is D. If there is an increasing write-off of inventory, it could also explain the higher cost of goods sold percentage.
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Suzan
3 months ago
I agree with Hester, because if the process to manufacture goods is more efficient, it could lead to higher cost of goods sold percentage.
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Hester
4 months ago
I think the answer is B.
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