In the audit approach for assessing fair value,which should the auditor determine for Level 2 assets?
A)The correspondence of the client's assets to similar assets in an active market.
B)Contingent liabilities.
C)Sensitivity of model used for marking to model.
D)The performance of tests of controls.

Question

Quizplus · Accepted Answer

For Level 2 assets, the auditor should determine the correspondence of the client's assets to similar assets in an active market. This assessment is important to ensure that the fair value measurement is based on reliable and relevant observable inputs. Contingent liabilities, sensitivity of model used for marking to model, and tests of controls are not relevant to determining the fair value of Level 2 assets.

In the Audit Approach for Assessing Fair Value,which Should the Auditor