The Auditor Performs Substantive Procedures Related to Property,plant and Equipment

question 81

Multiple Choice

The auditor performs substantive procedures related to property,plant and equipment to determine if the assets have been pledged as collateral or title has transferred.What is the primary assertion the auditor is testing?

• A)Valuation.
• B)Rights.
• C)Presentation and disclosure.
• D)Existence.

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Definitions:

Market Liquidity

The extent to which a market allows assets to be bought and sold quickly without affecting the asset's price significantly.

Liquidity Risk

The risk of being unable to quickly convert assets into cash without significant loss in value, affecting a company's or individual's ability to meet short-term obligations.

Hedge Fund Returns

The earnings generated from investments in a hedge fund, which is a pooled investment fund that employs different strategies to earn active returns for its investors.

Pairs Trading

A form of statistical arbitrage in which stocks are paired up based on underlying similarities and long/short positions are established to exploit any relative mispricing between each pair.