Determining if the financial instruments included in the schedule of investment activity at year-end are stated at appropriate amounts in accordance with accounting standards is the balance-related audit objective of
A) materiality.
B) realizable value.
C) consistency.
D) classification.

Question

Quizplus · Accepted Answer

The balance-related audit objective of determining if the financial instruments included in the schedule of investment activity at year-end are stated at appropriate amounts in accordance with accounting standards pertains to the realizable value objective. Realizable value refers to the amount that the company can reasonably expect to receive for those financial instruments. Therefore, the appropriate audit objective in this case is realizable value, and option B is the correct choice. Materiality, consistency, and classification are other audit objectives but not relevant to this scenario.

Determining If the Financial Instruments Included in the Schedule of Investment