The main focus taken by the auditor in verifying liability balances is on the discovery of
A)liabilities posted to the wrong account.
B)overstated liabilities.
C)understated or omitted liabilities.
D)overstated or extraneous liabilities.

Question

Quizplus · Accepted Answer

The main focus taken by the auditor in verifying liability balances is on the discovery of understated or omitted liabilities, as these can have a significant impact on the financial statements. Overstated or extraneous liabilities may also be important to identify, but they are typically more easily detected by the auditor and are less likely to have a material impact on the financial statements. Liabilities posted to the wrong account may also be important to identify, but this is generally a less significant concern for auditors than ensuring that all material liabilities have been properly recorded.

The Main Focus Taken by the Auditor in Verifying Liability