An auditor reviews purchase contracts to assess the conditions for the return of merchandise as a test related to which management assertion?
A)Existence.
B)Completeness.
C)Rights and obligations.
D)Valuation.

Question

Quizplus · Accepted Answer

The management assertion that relates to the conditions for the return of merchandise is "rights and obligations". This assertion relates to the company's ownership of assets and liabilities and whether they have the appropriate rights and obligations related to these items. By reviewing purchase contracts, the auditor can assess whether the company is meeting its obligations related to merchandise returns, which is a key aspect of the "rights and obligations" assertion.

An Auditor Reviews Purchase Contracts to Assess the Conditions for the Return