In testing the existence assertion for an asset, an auditor ordinarily works from the:
A)potentially unrecorded items to the financial report.
B)financial report to the potentially unrecorded items.
C)supporting evidence to the accounting records.
D)accounting records to the supporting evidence.

Question

Quizplus · Accepted Answer

In testing the existence assertion for an asset, an auditor would typically work from the accounting records (where the asset is expected to be recorded) to the supporting evidence (where the asset can be physically verified). The objective is to determine whether the asset actually exists and is owned by the company, which can be done by verifying the information in the accounting records through physical observation and other means. Working from the financial report to potentially unrecorded items or vice versa may not necessarily help in testing the existence of the asset.

In Testing the Existence Assertion for an Asset, an Auditor