Which of the following audit objectives relates primarily to the financial report assertion of valuation and allocation?
A)Inventory listings are accurately compiled and the totals are properly included in the inventory accounts.
B)Inventory quantities include all products, materials and supplies owned by the company that are in transit.
C)Slow-moving and obsolete items included in inventories are properly identified.
D)Inventories exclude items billed to customers or owned by others.

Question

Quizplus · Accepted Answer

The objective of ensuring that slow-moving and obsolete items included in inventories are properly identified directly relates to the valuation and allocation assertion. This is because it affects the accuracy of inventory valuation by ensuring that inventory is not overvalued due to the inclusion of items that may not be sellable at their recorded cost.

Which of the Following Audit Objectives Relates Primarily to the Financial