Question

When auditing merchandise inventory at year-end, the auditor performs audit procedures to obtain evidence that no goods held on consignment are included in the client’s ending inventory balance. The audit procedure gives evidence about which management assertion?

Answer 1

Answer : the auditor has to perform these procedure to obtain evidence

Assertions about account balances at the period end:
(1) Existence—assets, liabilities, and equity interests exist.
(2) Rights and obligations—the entity holds or controls the rights to assets, and liabilities are the obligations of entity.
(3) Completeness—all assets, liabilities and equity interests that should have been recorded have been recorded.
(4) Valuation and allocation—That Assets , liabilities, are included in the financial statements at appropriate amounts and any resulting valuation or allocation adjustments are appropriately recorded in its books.

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