The inherent risk of proceeds from stock sales not being received is most likely related to which of the following management assertions?
A)Completeness.
B)Presentation and disclosure.
C)Valuation.
D)Existence.

Question

Quizplus · Accepted Answer

The management assertion of existence relates to the occurrence of transactions and whether the assets and liabilities actually exist. In this case, the risk of proceeds from stock sales not being received is related to the existence assertion, as it questions whether the cash inflow from the sale of stock has in fact occurred. If the proceeds are not received, it indicates that the transaction did not exist or was not completed as intended.

The Inherent Risk of Proceeds from Stock Sales Not Being