The Statement About Inherent Risk Assessments for Property, Plant, and Equipment

question 19

Multiple Choice

The statement about inherent risk assessments for property, plant, and equipment that is inaccurate is

• A) inherent risk is normally low for the classification and presentation assertions for PPE assets acquired under finance leases.
• B) inherent risk is normally low for the existence assertion in a merchandising entity because PPE assets are not generally vulnerable to theft.
• C) inherent risk is normally moderate to high for the existence assertion in a manufacturing entity because scrapped or retired PPE assets may not be written off the books.
• D) inherent risk is normally low for the accuracy, valuation and allocation assertion when PPE assets are purchased for cash.