When testing for the ________ assertion, auditors gather evidence to verify recorded assets are owned by the entity and recorded liabilities represent commitments of the entity.
A)existence
B)valuation and accuracy
C)rights and obligations
D)occurrence

Question

Quizplus · Accepted Answer

The assertion being referred to is rights and obligations, which focuses on ensuring that recorded assets are owned by the entity and recorded liabilities represent commitments of the entity. Choice A (existence) focuses on verifying whether recorded transactions and balances exist, Choice B (valuation and accuracy) focuses on whether recorded transactions and balances are valued and recorded accurately, and Choice D (occurrence) focuses on verifying whether recorded transactions actually occurred.

When Testing for the ________ Assertion, Auditors Gather Evidence to Verify