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An audit program for plant and equipment includes the following procedure
“For a sample of additions recorded in the non-current asset register agree the details (e.g. description, amount and date) to the purchase invoice.”
Which of the following assertions is tested by this procedure?
A. Completeness
B. Existence
C. Occurrence
D. RightsI think the answer is B.Existence, but studyhub says that its Occurrence but this assertion isn’t even relevant to account balances. So could you tell me if I’m wrong here or is the Studyhub answer wrong?
Thank you.
Additions are PURCHASES of non-current assets – i.e. a class of transactions.
The existence assertion concerns physical existence at the reporting date – that an asset was acquired sometime during the year does not test this assertion (because it could be lost/stolen/sold etc before the year end).
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