An auditor's purpose in reviewing credit ratings of customers with delinquent accounts receivable most likely is to obtain evidence concerning management's assertions about:

Question

Quizplus · Accepted Answer

Choice "D" is correct. An auditor's purpose in reviewing credit ratings of customers with delinquent accounts receivable most likely is to obtain evidence concerning management's assertions about valuation or allocation, which pertain to the presentation of assets, liabilities, and equity interests at appropriate amounts. The auditor is concerned with the proper valuation of those receivables. Choice "A" is incorrect. Understandability and classification deals with whether the components of the financial statements are properly presented, described, and disclosed, not whether they are properly valued. Choice "B" is incorrect. Existence relates to whether assets, liabilities, and equity interests exist. Choice "C" is incorrect. Rights and obligations pertain to ownership of assets and liabilities, not to the valuation of those accounts.

An Auditor's Purpose in Reviewing Credit Ratings of Customers with Delinquent