You are auditing a manufacturing company that has a large production facility. Some of the production equipment is held through lease agreements. Which of the following is the account balance assertion you would be most concerned about?
A)Existence or occurrence.
B)Completeness.
C)Rights and obligations.
D)Accuracy.

Question

Quizplus · Accepted Answer

When auditing leased equipment, the auditor needs to ensure that the company has the right to use the equipment (rights and obligations) and that the lease agreement is appropriately recorded and disclosed in the financial statements. Therefore, the account balance assertion of most concern would be rights and obligations.

You Are Auditing a Manufacturing Company That Has a Large