ExamTopics Logo
Mail Us[email protected]
Menu
Aicpa Discussions
exam questions

Exam AUD All Questions

View all questions & answers for the AUD exam
Go to Exam

Exam AUD topic 1 question 738 discussion

Actual exam question from AICPA's AUD
Question #: 738
Topic #: 1
[All AUD Questions]

An auditor most likely would analyze inventory turnover rates to obtain evidence concerning management's assertions about:

  • A. Existence.
  • B. Rights and obligations.
  • C. Understandability and classification.
  • D. Valuation and allocation.
Show Suggested Answer Hide Answer
Suggested Answer: D 🗳️
Choice "D" is correct. An auditor most likely would analyze inventory turnover rates to obtain evidence concerning management's assertions about valuation and allocation (i.e., if the inventory is becoming older, an obsolescence reserve might be required).
Choice "A" is incorrect. The existence assertion addresses whether assets, liabilities, and equity interests exist. Analysis of inventory turnover would not provide evidence concerning this assertion.
Choice "B" is incorrect. Rights and obligations pertain to ownership of assets and liabilities. Analysis of inventory turnover would not provide evidence concerning this assertion.
Choice "C" is incorrect. Understandability and classification deal with whether the components of the financial statements are properly presented, described, and disclosed. Analysis of inventory turnover would not provide evidence concerning this assertion.
by gemazyni at April 5, 2025, 5:03 p.m.

Comments

Chosen Answer:
This is a voting comment (?). It is better to Upvote an existing comment if you don't have anything to add.
Switch to a voting comment New
Submit Cancel
Currently there are no comments in this discussion, be the first to comment!
Community vote distribution
A (35%)
C (25%)
B (20%)
Other
Most Voted
A voting comment increases the vote count for the chosen answer by one.

Upvoting a comment with a selected answer will also increase the vote count towards that answer by one. So if you see a comment that you already agree with, you can upvote it instead of posting a new comment.

SaveCancel