The specific audit objective "accounts payable are liabilities of the entity at the balance date" is derived from the:
A) completeness assertion.
B) valuation assertion.
C) presentation assertion.
D) rights and obligations assertion.

Question

Quizplus · Accepted Answer

The specific audit objective "accounts payable are liabilities of the entity at the balance date" relates to the rights and obligations assertion, which focuses on whether the entity has legal ownership or control over the assets or liabilities recorded in the financial statements. In this case, the objective is to ensure that the accounts payable are indeed obligations that the entity owes to its creditors, and not some other form of liability. By confirming that the entity has a legal obligation to pay its payables at the balance date, the auditor can provide assurance that the rights and obligations assertion is met.

The Specific Audit Objective "Accounts Payable Are Liabilities of the Entity