Your audit client is a retailer that sells some of its own merchandise and a large proportion of merchandise held on consignment from suppliers.Which account balance assertion for inventory would this cause to be most at risk?
A)Existence.
B)Completeness.
C)Rights and obligations.
D)Valuation and allocation.

Question

Quizplus · Accepted Answer

Rights and obligations are most at risk because the retailer does not own the consigned goods, thus they do not have the same rights as they do to the merchandise they own. This assertion addresses whether the entity has rights to the inventory it reports, which is crucial when goods are held on consignment.

Your Audit Client Is a Retailer That Sells Some of Its