The following audit procedure tests primarily which balance-related audit objective for accounts receivable: inquire of management whether there are any related-party loans.
A) existence
B) completeness
C) classification
D) all of the above.

Question

Quizplus · Accepted Answer

The audit procedure of inquiring about related-party loans is primarily related to the balance-related audit objective of classification, which aims to ensure that accounts receivable are properly classified in the financial statements. It is important to distinguish between trade and non-trade receivables and related-party transactions, as they can have an impact on the presentation and disclosure of the financial statements. This audit procedure is not directly related to the existence or completeness of receivables, although it may indirectly provide some evidence for these objectives. Therefore, the correct answer is C) classification.

The Following Audit Procedure Tests Primarily Which Balance-Related Audit Objective