Tests of the cutoff objective for prepaid insurance is normally not performed by auditors.

Question

Quizplus · Accepted Answer

Auditors typically do not perform tests of the cutoff objective for prepaid insurance because the risk of material misstatement is low. Prepaid insurance is a short-term asset that is typically used up within a year, and the amount of prepaid insurance that is carried over from one year to the next is usually not material.

Tests of the Cutoff Objective for Prepaid Insurance Is Normally