In testing plant and equipment balances, an auditor may inspect new additions listed on the analysis of plant and equipment. This procedure is designed to obtain evidence concerning management's assertion(s) about

Question

Quizplus · Accepted Answer

Inspecting new additions listed on the analysis of plant and equipment helps the auditor obtain evidence about the existence or occurrence of the assets, i.e., whether they actually exist and whether they belong to the entity as of the balance sheet date. It does not provide evidence about presentation and disclosure, as this is related to how the assets are classified, described, and disclosed in the financial statements. Therefore, the answer is B.

In Testing Plant and Equipment Balances, an Auditor May Inspect