Confirmation Would Be Most Effective in Addressing the Existence Assertion

question 73

Multiple Choice

Confirmation would be most effective in addressing the existence assertion for the:

• A)Addition of a milling machine to a machine shop.
• B)Payment of payroll during regular course of business.
• C)Inventory held on consignment.
• D)Granting of a patent for a special process developed by the organization.

---

Definitions:

Expected Loss

a calculation used in finance and insurance to estimate the average financial loss or cost associated with an investment or insurance policy over a period.

Adverse Selection

A situation in which one party in a transaction has more information than the other, leading to an imbalance and potentially poor market outcomes, commonly seen in insurance markets.

Insurance

A financial product or agreement that provides compensation for specific losses or damages in return for payments made.

High Risk

Refers to situations or investments that have a high potential for loss or failure.