It is simple for auditors to test the costs capitalized for discovery of natural resources because only successful efforts may be recorded

Question

Quizplus · Accepted Answer

This statement is false. Auditors may need to test the costs of both successful and unsuccessful efforts when it comes to the discovery of natural resources. The costs of unsuccessful efforts may need to be expensed rather than capitalized, so auditors would need to ensure that this distinction is correctly made in the financial statements.

It Is Simple for Auditors to Test the Costs Capitalized