Your audit client is under intense pressure to meet an earnings target. Which transaction assertion for transactions within the purchasing process are you most concerned with?
A)Existence or occurrence.
B)Completeness.
C)Rights and obligations.
D)Presentation and disclosure.

Question

Quizplus · Accepted Answer

The earnings target pressure creates a higher risk of management overstating revenue and understating expenses, therefore, the completeness assertion is the most concerning within the purchasing process. It ensures that all purchasing transactions are recorded and disclosed in the financial statements. If management manipulates this assertion, they may omit some transactions to understate expenses, achieving the earnings target artificially.

Your Audit Client Is Under Intense Pressure to Meet an Earnings