The realizable value audit objective is not applicable when auditing prepaid insurance or insurance expense.

Question

Quizplus · Accepted Answer

The realizable value audit objective pertains to verifying the accuracy of the amounts recorded for the realization of assets or settlement of liabilities. This objective is not applicable when auditing prepaid insurance or insurance expense, as these accounts do not involve the disposition of assets or liabilities. Instead, the relevant audit objectives for prepaid insurance and insurance expense may include existence, completeness, valuation, and presentation and disclosure.

The Realizable Value Audit Objective Is Not Applicable When Auditing