In testing plant and equipment balances, an auditor may physically inspect new additions listed on the summary of plant and equipment transactions for the year. This procedure is designed to obtain evidence concerning management's assertions about classes of transactions and events, and specifically, which assertion?
A)Occurrence.
B)Cutoff.
C)Authorization.
D)Classification.

Question

Quizplus · Accepted Answer

Physically inspecting new additions listed on the summary of plant and equipment transactions for the year helps the auditor obtain evidence about whether the transactions actually occurred, thus testing the occurrence assertion. The cutoff assertion relates to whether transactions were recorded in the correct accounting period, the authorization assertion relates to whether transactions were approved by the appropriate parties, and the classification assertion relates to whether transactions were recorded in the correct accounts.

In Testing Plant and Equipment Balances, an Auditor May Physically