An auditor reviews purchase contracts to assess the conditions for the return of merchandise as a test related to which management assertion?
A) Existence
B) Completeness
C) Rights and Obligations
D) Valuation

Question

Quizplus · Accepted Answer

The management assertion being tested in this case relates to the rights and obligations of the company regarding return of merchandise. The auditor is reviewing the purchase contracts to ensure that the company has contractual rights to return merchandise in certain situations and that the terms and conditions of such returns are properly recorded in the accounts.

An Auditor Reviews Purchase Contracts to Assess the Conditions for the Return