Which of the following audit procedures would be the most correct in determining the audit objective of existence for the equipment account in the fixed asset master file?
A) Examine vendor invoices and receiving reports.
B) Review transactions near the balance sheet date.
C) Recalculate vendor invoices.
D) Examine vendor invoices for correct accounting treatment.

Question

Quizplus · Accepted Answer

Examining vendor invoices and receiving reports would provide evidence for the existence of the equipment in the fixed asset master file, as it would show that the company actually received and paid for the equipment. Reviewing transactions near the balance sheet date would not necessarily provide evidence for the existence of the equipment, as it does not confirm that the equipment actually exists. Recalculating vendor invoices would not provide evidence for existence, as it would only verify the accuracy of the invoice amounts. Examining vendor invoices for correct accounting treatment would only verify whether the equipment was recorded properly, but would not provide evidence for whether the equipment actually exists.

Which of the Following Audit Procedures Would Be the Most