A major consideration in verifying the ending balance in permanent assets is the possibility of existing legal encumbrances. Tests to identify possible legal encumbrances would satisfy the audit objective for:
A) existence.
B) classification.
C) detail tie- in.
D) disclosure.

Question

Quizplus · Accepted Answer

The audit objective for verifying the ending balance in permanent assets with regards to possible legal encumbrances is related to disclosure, as the existence of such encumbrances needs to be properly disclosed in the financial statements. Therefore, tests to identify possible legal encumbrances would satisfy the disclosure audit objective.

A Major Consideration in Verifying the Ending Balance in Permanent