The test of details of balance procedure that requires the auditor to review contracts with suppliers and customers and inquire of management for the possibility of the inclusion of consigned or other non-owned inventory is an attempt to satisfy the objective of
A)existence.
B)completeness.
C)realizable value.
D)rights and obligations.

Question

Quizplus · Accepted Answer

Reviewing contracts and inquiring about the possibility of consigned or other non-owned inventory primarily addresses the auditor's concern about whether the entity has the rights to the inventory it reports. This relates to the rights and obligations assertion, ensuring that the entity actually owns or has rights to the assets reported on its balance sheet.

The Test of Details of Balance Procedure That Requires the Auditor