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An auditor most likely would inspect loan agreements under which an entity's inventories are pledged to support management's financial statement assertion of completeness with respect to:
Suggested Answer: A
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Choice 'a' is correct. Inspecting loan agreements under which an entity's inventories are pledged provides evidence regarding completeness with respect to presentation and disclosure, since such information must be disclosed in the financial statements.
Choices 'b', 'c', and 'd' are incorrect. Inspecting loan agreements under which an entity's inventories are pledged does not provide information regarding the completeness of transactions, events, or account balances.
12 comments · newest first
EL
Elin
1 month ago
A is my pick. Presentation and disclosure are key for transparency.
SO
Solange
1 month ago
I lean towards D. All aspects are important for a complete picture.
KA
Kattie
1 month ago
I think it's C. Completeness relates to account balances.
CO
Corinne
2 months ago
I thought it could be A too, but now I'm not so sure!
LA
Lazaro
2 months ago
Agreed with C) Account balances. It's about verifying assets.
JA
Janine
2 months ago
Wait, why would it be all of them? Seems like a stretch.
ZO
Zona
2 months ago
I think it's A) Presentation and disclosure. Makes more sense.
ME
Melita
2 months ago
Definitely C) Account balances. That's the key here.
PH
Phillip
2 months ago
I vaguely remember that completeness could apply to presentation and disclosure too, so maybe it’s D) All of the above? That sounds plausible.
SH
Shad
3 months ago
I’m leaning towards C) Account balances since it seems most relevant to the inventories being pledged, but I could be wrong.
KA
Kallie
3 months ago
I think this question is similar to one we practiced on financial statement assertions. I feel like completeness might tie into all of them, but I can't recall the details.
NA
Naomi
3 months ago
I remember we discussed how loan agreements relate to completeness, but I'm not sure if it's specifically about account balances or something broader.