You are auditing a store that sells merchandise. Some of the store merchandise is held on consignment. Which account balance assertion for inventory should you be most concerned about verifying?
A)Existence or occurrence.
B)Completeness.
C)Rights and obligations.
D)Valuation or allocation.

Question

Quizplus · Accepted Answer

Rights and obligations are crucial in the context of consigned goods because the store does not own these items. The auditor needs to ensure that the inventory recorded reflects only the items the store has the right to sell, distinguishing owned inventory from consigned goods.

You Are Auditing a Store That Sells Merchandise