An auditor determines that there is an inherent risk that dividends may be recorded and paid before being declared. This determination is most likely tied to which of the following management assertions?
A)Completeness.
B)Presentation and disclosure.
C)Valuation.
D)Existence.

Question

Quizplus · Accepted Answer

The management assertion of existence relates to whether the recorded assets and liabilities actually exist at the balance sheet date. In this case, the auditor's concern that dividends may be recorded and paid before being declared relates to whether the dividend actually existed at the balance sheet date, which falls under the assertion of existence.

An Auditor Determines That There Is an Inherent Risk That