The auditor selects a sample of asset disposals and examines the sales documentation evidencing disposal of the equipment and recomputes gain or loss on the disposal. This audit steps primarily tests which of the following assertions for the equipment account?
A) Existence.
B) Presentation and disclosure.
C) Rights.
D) Valuation.

Question

Quizplus · Accepted Answer

This audit step primarily tests the valuation assertion for the equipment account. By recomputing gain or loss on the disposal and examining the sales documentation, the auditor is verifying that the disposal was recorded at the correct amount, which relates to the valuation of the asset.

The Auditor Selects a Sample of Asset Disposals and Examines