Empire Business Machines,Inc.(EBM)is audited by Flintstone and Sigmond Co.Empire utilizes periodic inventory and has ten locations throughout Wyoming,Utah and Idaho.The audit program of Flintstone and Sigmond requires that the following procedure be performed by the senior auditor,manager and four other auditors: Procedure A-1 of Flintstone and Sigmond primarily relates to which management's assertion?
A)existence
B)valuation
C)observation
D)rights

Question

Empire Business Machines,Inc.(EBM)is audited by Flintstone and Sigmond Co.Empire utilizes periodic inventory and has ten locations throughout Wyoming,Utah and Idaho.The audit program of Flintstone and Sigmond requires that the following procedure be performed by the senior auditor,manager and four other auditors:  Procedure A-1 of Flintstone and Sigmond primarily relates to which management's assertion?
A)existence 
B)valuation 
C)observation 
D)rights

Quizplus · Accepted Answer

Procedure A-1 primarily relates to the existence assertion, as it involves physically counting the inventory at each of the ten locations to ensure that it actually exists.