Confirmation would be most effective in addressing the existence assertion for the:
A)Addition of a milling machine to a machine shop.
B)Payment of payroll during regular course of business.
C)Inventory held on consignment.
D)Granting of a patent for a special process developed by the organization.

Question

Quizplus · Accepted Answer

Confirmation from the consignor would provide the most reliable evidence of the existence of inventory held on consignment.

Answer: D 
 Confirmation from the patent office would provide the most reliable evidence of the existence of a granted patent for a special process developed by the organization.

Answers A and B are not appropriate because addition of a milling machine and payment of payroll are routine transactions and can be verified through other means such as observation, documentation, or inquiry with relevant personnel.

Confirmation Would Be Most Effective in Addressing the Existence Assertion