Question

The selection of an appropriate inventory cost flow assumption for an individual company is made by:

a. the external auditors
b. the SEC
c. the internal auditors
d. management

Answer 1

d. Management.

Step-by-step explanation:

Option a and b are incorrect because external parties of a business (the external auditors, management, suppliers) can not decide on the company's internal affairs.

Option c is wrong because the auditor's task is to inspect the item, not making a decision.

Management has the complete authority of making any internal decision of an organization.

Therefore, option d is the answer.