Which of the following audit objectives relates primarily to the financial report assertion, rights and obligations?
A) Inventories are properly classified in the statement of financial position as current assets.
B) Inventories exclude items billed to customers or owned by others.
C) Slow-moving, excess, defective and obsolete items included in inventories are properly identified.
D) Inventory quantities include all products, materials and supplies owned by the company.

Question

Quizplus · Accepted Answer

The audit objective related primarily to the financial report assertion, rights and obligations is to ensure that inventories exclude items billed to customers or owned by others. This is because this audit objective relates to the company's ownership of its inventory and whether the financial statements accurately reflect this ownership. Choices A, C and D relate to other financial report assertions such as completeness, valuation and accuracy.

Which of the Following Audit Objectives Relates Primarily to the Financial