An auditor most likely would make inquiries of production and sales personnel concerning possible obsolete or slow-moving inventory to support management's financial statement assertion of:

Question

Quizplus · Accepted Answer

Choice "A" is correct. An audit objective for inventory valuation and allocation is to determine that slow-moving, excess, defective and obsolete items included in inventory are properly identified. Inquiries of production and sales personnel concerning possible excess or obsolete inventory items would support management's assertion of valuation and allocation. Choice "B" is incorrect. Assertions about rights and obligations deal with whether assets are the rights of the entity and liabilities are the obligations of the entity at a given date. Choice "C" is incorrect. Assertions about existence deal with whether assets, liabilities, and equity interests exist at a given date. Choice "D" is incorrect. Assertions about understandability and classification deal with whether particular components of the financial statements are properly presented, described, and disclosed.

An Auditor Most Likely Would Make Inquiries of Production and Sales