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James CPAs are currently working on the audit of Henderson LLC, a large firm and...

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Accounting

image James CPAs are currently working on the audit of Henderson LLC, a large firm and national distributor of coffee mugs an others plastic wares. Henderson LLC has been a client of James CPAs for a number of years. During the most recent year', audit, James CPAs have noted that the client's finished goods inventory account appears to have increased relative to prio years. Which of the following represents the best possible explanation for this? This is probably because Henderson LLC is trying to overstate its assets, and the auditor will need to adjust the inventory value down accordingly. This may be a sign that demand for Henderson LLCs' products is decreasing, and worthy of further attention. This may just be because Henderson LLC has switched to a different inventory costing method and is of no concern to the auditor. This is probably because Henderson LLC is producing more inventory and is of no concern to the auditors

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