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In search for unrecorded liabilities which account-balance related assertion has the highest inherent risk of misstatement?

In search for unrecorded liabilities which account-balance related assertion has the highest inherent risk of misstatement?

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Answer #1

Completeness , Existence , Rights and obligations and finally Valuation are seen as the main assertions relating to Account balances or the Balance Sheet.

Now, according to the question, the assertion that has the highest inherent risk of misstatement relating to unrecorded liabilities has to be Completeness.

The reason for stating Completeness as the assertion most inherent is because it is the one that is related to disclosures of what has to be recorded and what should not. So in the case of unrecorded liabilities it would most probably be because it wasnt disclosed as a transaction that had to be recorded.

Hope this answers the question. If you liked the answer , please provide an upvote . It would be really encouraging for me. Thank You

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