Final answer:
An auditor inspects loan agreements to ensure that financial statements accurately represent the entity's inventory pledges and to verify the assertion of completeness in presentation and disclosure.An auditor would inspect loan agreements to ensure the completeness of account balances.
Step-by-step explanation:
An auditor would likely inspect loan agreements where an entity's inventories are pledged to evaluate the financial statement assertion of completeness in relation to presentation and disclosure. This involves ensuring that all liabilities and assets, including pledged inventories, are fully disclosed on the financial statements, and the terms of the pledges are clearly presented to users of the financial statements.
By inspecting the loan agreements, auditors can provide reasonable assurance that the entity has disclosed all of its inventory pledges, and thus that the financial statements are complete in this respect.An auditor would most likely inspect loan agreements under which an entity's inventories are pledged to support management's financial statement assertion of completeness with respect to account balances.