Empire Business Machines,Inc.(EBM)is audited by Flintstone and Sigmond Co.Empire utilizes the FIFO cost flow assumption at the lower of cost or market for its inventory and has ten locations throughout Wyoming,Utah and Idaho.The audit program of Flintstone and Sigmond requires that the following procedures be performed by the senior auditor: Procedure B-1 and B-2 of Flintstone and Sigmond primarily relates to which management's assertion?
A)existence
B)valuation
C)rights and obligations
D)presentation and disclosure

Question

Empire Business Machines,Inc.(EBM)is audited by Flintstone and Sigmond Co.Empire utilizes the FIFO cost flow assumption at the lower of cost or market for its inventory and has ten locations throughout Wyoming,Utah and Idaho.The audit program of Flintstone and Sigmond requires that the following procedures be performed by the senior auditor:  Procedure B-1 and B-2 of Flintstone and Sigmond primarily relates to which management's assertion?
A)existence 
B)valuation 
C)rights and obligations 
D)presentation and disclosure

Quizplus · Accepted Answer

Procedure B-1 and B-2 of Flintstone and Sigmond relate to the valuation assertion, as they require the auditor to evaluate the lower of cost or market inventory valuation method used by EBM.