The test of details of balance procedure that requires the auditor to perform tests of lower-of-cost-or-market,selling price,and obsolescence is an attempt to satisfy the objective of
A)existence.
B)completeness.
C)accuracy.
D)valuation.

Question

Quizplus · Accepted Answer

The test of details of balance procedure that requires the auditor to perform tests of lower-of-cost-or-market, selling price, and obsolescence is an attempt to satisfy the objective of valuation. This objective is concerned with whether the financial statement elements are included in the financial statements at appropriate amounts. The auditor tests these specific areas to ensure that inventory is correctly stated at its lower cost or market value, that there are no issues with slow-moving inventory, and that the value of the inventory is not overstated. Therefore, the correct answer is D) valuation.

The Test of Details of Balance Procedure That Requires the Auditor