The engineering department at Omni Company built a piece of equipment in the company's own shop for use in the company's operations. When looking at the ending balance for the fixed asset account the auditor examined all work orders, purchased materials, labor cost reports, and applied overhead that were capitalized as part of the equipment costs. Which of the following is the ASB balance assertion most closely related to the auditor's testing?
A)Existence.
B)Completeness.
C)Rights and obligations.
D)Valuation.

Question

Quizplus · Accepted Answer

The auditor's testing of all work orders, purchased materials, labor cost reports, and applied overhead to determine the capitalized cost of the equipment is related to the valuation assertion, which ensures that the recorded value of the fixed asset is accurate and reflects its economic worth.

The Engineering Department at Omni Company Built a Piece of Equipment