In evaluating the adequacy of the allowance for doubtful accounts,an auditor most likely reviews the entity's aging of receivables to support management's financial statement assertion of
A) Existence.
B) Valuation or allocation.
C) Completeness.
D) Rights and obligations.

Question

Quizplus · Accepted Answer

The adequacy of the allowance for doubtful accounts is a matter of the valuation or allocation assertion. By reviewing the aging of receivables, the auditor can assess whether the allowance is sufficient to cover any potential bad debts and ensure that the receivables are fairly valued in the financial statements. The other assertions (existence, completeness, and rights and obligations) are not directly related to the adequacy of the allowance for doubtful accounts.

In Evaluating the Adequacy of the Allowance for Doubtful Accounts,an