Which are the two audit assertions considered most important to the auditor concluding there are no material misstatements in trade receivables at year-end?
A) valuation and allocation, and rights and obligations
B) existence and occurrence
C) occurrence and rights and obligations
D) existence and valuation and allocation

Question

Quizplus · Accepted Answer

The two audit assertions considered most important to the auditor concluding there are no material misstatements in trade receivables at year-end are existence and valuation and allocation. Existence is important to ensure that the trade receivables actually exist and belong to the company, while valuation and allocation are necessary to confirm that the trade receivables are recorded accurately and fairly. Rights and obligations assertion relates to whether the company has legal rights to its trade receivables and whether the trade receivables are stated at the correct amount. Occurrence assertion relates to whether the trade receivables actually occurred and whether the transaction was recorded properly. Although these assertions are also important, they are not the two most important assertions for trade receivables.

Which Are the Two Audit Assertions Considered Most Important to the Auditor