Auditors who are searching for evidence that assets, liabilities, and equity items have been recorded at appropriate amounts and allocated to the correct general ledger accounts consider ________.
A)existence
B)classification
C)valuation and allocation
D)rights and obligations

Question

Quizplus · Accepted Answer

Auditors concerned with the accuracy of the financial statements will focus on the valuation and allocation of assets, liabilities, and equity items to ensure they have been recorded at appropriate amounts and assigned to the correct accounts. Existence relates to whether the assets and liabilities exist and whether transactions occurred during the reporting period. Classification involves the appropriate categorization of transactions into the appropriate general ledger accounts. Rights and obligations relate to whether the company has legal ownership or responsibility for the assets and liabilities.

Auditors Who Are Searching for Evidence That Assets, Liabilities, and Equity