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AICPA CPA-Auditing Exam - Topic 2 Question 130 Discussion

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:
A) Presentation and disclosure.
B) Transactions and events.
C) Account balances.
D) All of the above.

AICPA CPA-Auditing Exam - Topic 2 Question 130 Discussion

Actual exam question for AICPA's CPA-Auditing exam
Question #: 130
Topic #: 2
[All CPA-Auditing Questions]

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:

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Suggested Answer: A

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.


by Laurel at Jul 18, 2026, 12:55 PM

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Corinne
1 day ago
I thought it could be A too, but now I'm not so sure!
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Lazaro
6 days ago
Agreed with C) Account balances. It's about verifying assets.
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Janine
11 days ago
Wait, why would it be all of them? Seems like a stretch.
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Zona
17 days ago
I think it's A) Presentation and disclosure. Makes more sense.
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Melita
22 days ago
Definitely C) Account balances. That's the key here.
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Phillip
27 days 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.
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Shad
1 month ago
I’m leaning towards C) Account balances since it seems most relevant to the inventories being pledged, but I could be wrong.
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Kallie
1 month 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.
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Naomi
1 month 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.
upvoted 0 times
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