Explain the difference between the roll-forward procedure and the rollover method.
Roll forward procedure is the method used for inventory counting, sales figure and purchase to determine the closing inventory. After determining the closing inventory, we check the physical inventory with the inventory balance and the difference is noted and investigated.
Rollover focuses on the current period income statement and ignores the prior year misstatements. It quantifies misstatement on reversing effect on current period statement, irrespective of the effect on balance sheet.
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