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 which audit objective?
A) detail tie-in
B) disclosure
C) classification
D) existence

Question

Quizplus · Accepted Answer

The audit objective of disclosure involves ensuring that all significant information is disclosed in the financial statements, including any legal or contractual obligations that may affect the company's permanent assets. Therefore, tests to identify possible legal encumbrances would satisfy the disclosure audit objective.

A Major Consideration in Verifying the Ending Balance in Permanent