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 revenue overstatement can lead to inflated profits, which can attract investors and increase shareholder value, while revenue understatement can depress profits and harm the company's reputation. Therefore, auditors must be diligent in ensuring that all reported revenues are valid, earned, and accurately recorded.

Auditors Are More Concerned with the Occurrence Assertion for Revenues