What do auditors do when considering existence?
A)Search for evidence to verify that asset, liability, and equity items on the balance sheet actually exist.
B)Gather evidence to verify recorded assets are owned by the entity and recorded liabilities represent commitments of the entity.
C)Search for assets, liabilities, and equity items to ensure they have been recorded.
D)Search for evidence that assets, liabilities, and equity items have been recorded at appropriate amounts.

Question

Quizplus · Accepted Answer

When auditors consider existence, they are searching for evidence to verify that the asset, liability, and equity items on the balance sheet actually exist. This means they are looking for tangible items such as inventory, equipment, and buildings, as well as intangible items such as patents and trademarks. The goal is to ensure that these items are not simply fictitious entries on the balance sheet, but are real assets or liabilities that can be verified through physical inspection or other objective evidence.

What Do Auditors Do When Considering Existence