Much of an auditor's work during a financial statement audit consists of obtaining and evaluating evidence about
Question:
Much of an auditor's work during a financial statement audit consists of obtaining and evaluating evidence about the assertions embodied within an entity's financial statements.
Following are several tasks or questions considered by an auditor:
1. Observe client personnel count inventory quantities.
2. Include the following statement within the management representation letter: "There are no material transactions that have not been properly recorded in the accounting records underlying the financial statements."
3. For a sample of product lines, trace prices used in the final priced inventory to recent invoice prices.
4. Do the financial statements include separate captions for raw materials, work in process, and finished goods inventory?
5. Confirm inventory held in public warehouses.
Required:
For each of the tasks or questions indicate and discuss the dominant financial statement assertion addressed.
Step by Step Answer: