As Part of the Audit Testing,the Auditor Is Conducting Substantive

question 138

Multiple Choice

As part of the audit testing,the auditor is conducting substantive analytical review over time (trend analysis) of bad debts to evaluate the quality of the accounts receivable.Which audit assertion is this associated with?

• A)valuation
• B)classification
• C)rights and obligations
• D)occurrence

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Definitions:

IFRS 16

An International Financial Reporting Standard that provides guidance on accounting for leases, requiring lessees to recognize most leases on their balance sheets.

Lease Receipts

Income received from leasing out an asset to a lessee under a lease agreement.

Finance Lease

A lease agreement that transfers substantially all the risks and rewards incidental to ownership of an asset. Title may or may not eventually be transferred.

AASB 16

An accounting standard issued by the Australian Accounting Standards Board specifying the principles for recognition, measurement, presentation, and disclosure of leases.