Auditors are more concerned with the occurrence assertion for revenues than the completeness assertion because:
A)entities are more likely to overstate than understate revenues.
B)entities are more likely to understate than overstate revenues.
C)it is difficult to determine when services have been performed.
D)the allowance for doubtful accounts often is understated.

Question

Quizplus · Accepted Answer

Auditors are more concerned with the occurrence assertion for revenues because entities are more likely to overstate revenues than understate them. This is because entities usually have an incentive to overstate revenues in order to improve their financial position or meet analyst expectations. On the other hand, the completeness assertion is more relevant for expenses, as entities are more likely to understate expenses in order to improve their net income.

Auditors Are More Concerned with the Occurrence Assertion for Revenues