To satisfy the valuation assertion when auditing an investment, an auditor most likely would:
A)inspect the stock certificates evidencing the investment.
B)examine the audited financial statements of the investee company.
C)review the broker's advice or canceled check for the investment's acquisition.
D)obtain market quotations from financial newspapers, periodicals, or electronic outlets.

Question

Quizplus · Accepted Answer

To satisfy the valuation assertion when auditing an investment, obtaining market quotations from financial newspapers, periodicals, or electronic outlets is the appropriate choice. This will help the auditor to determine whether the investment has been properly valued on the financial statements. Inspecting the stock certificates (option A) will only confirm ownership of the investments, while examining the audited financial statements of the investee company (option B) will not provide sufficient evidence to support the valuation assertion. Reviewing the broker's advice or canceled check for the investment's acquisition (option C) will only confirm the acquisition transaction, but not the valuation of the investment itself.

To Satisfy the Valuation Assertion When Auditing an Investment, an Auditor