The main focus taken by the auditor in verifying liability balances is on the discovery of I. understated liabilities.
II) omitted liabilities.
A) I only
B) II only
C) both I and II
D) neither I nor II

Question

Quizplus · Accepted Answer

The main focus taken by the auditor in verifying liability balances is on the discovery of both understated and omitted liabilities. This is because both types of errors can lead to material misstatements in the financial statements, and therefore need to be carefully checked by the auditor. Understated liabilities occur when an expense or obligation has been recognized at an amount that is lower than its actual value, while omitted liabilities occur when an expense or obligation has not been recognized at all. By verifying these balances, the auditor can ensure that the financial statements are fairly presented and comply with auditing standards.

The Main Focus Taken by the Auditor in Verifying Liability