Final answer:
The most difficult balance-related audit objective to test when dealing with financial instruments is accuracy.
Step-by-step explanation:
The most difficult balance-related audit objective to test when dealing with financial instruments is the accuracy objective. The accuracy objective ensures that the financial statements accurately represent the financial position of the entity. This can be challenging to test because it requires validating the correctness of the information provided, such as the value of assets and liabilities.
For example, when auditing a bank's financial instruments, the auditor would need to verify the accuracy of loan balances and determine if any adjustments or write-offs are required.
Other balance-related audit objectives include completeness (ensuring all transactions are recorded), classification (ensuring transactions are properly classified), and cutoff (ensuring transactions are recorded in the correct accounting period).