The tests of details of balances procedure for manufacturing equipment that requires the auditor to examine vendors' invoices of closely related accounts (such as repairs and maintenance)to uncover items that should be manufacturing equipment would satisfy the audit objective of
A)detail tie-in.
B)existence.
C)classification.
D)accuracy.

Question

Quizplus · Accepted Answer

The audit objective of classification is to ensure that all transactions and account balances are appropriately classified. By examining vendors' invoices of closely related accounts (such as repairs and maintenance) to uncover items that should be manufacturing equipment, the auditor is ensuring that the items are appropriately classified as manufacturing equipment instead of repairs and maintenance.

The Tests of Details of Balances Procedure for Manufacturing Equipment