In auditing an asset valued at fair value,which of the following potentially provides the auditor with the strongest evidence?
A)A price for a similar asset obtained from an active market.
B)An appraisal obtained discounting future cash flows.
C)Management's judgment of the cost to purchase an equivalent asset.
D)The historical cost of the asset.

Question

Quizplus · Accepted Answer

A price for a similar asset obtained from an active market provides the strongest evidence as it is based on actual market transactions and reflects the most up-to-date information available. Appraisals and management's judgment may be influenced by various assumptions and factors, and historical cost is irrelevant to the current fair value of the asset.

In Auditing an Asset Valued at Fair Value,which of the Following