Final answer:
The audit objective that relates to the management assertion of existence is that the transaction actually occurred. This confirmation is essential for the financial statements to reflect the true nature of the organization's transactions and activities. correct option is B.
Step-by-step explanation:
The question refers to which audit objective relates to the management assertion of existence. The management assertion of existence concerns that assets, liabilities, and transactions exist at a given date. Among the options provided, the one that relates to the assertion of existence is B. A transaction actually occurred (i.e., it is real). This is because asserting the existence of a transaction means confirming that it actually took place and is not fictitious or merely recorded on paper.
In context to the examples given about the verification of subjective experiences as related to observations that require interpretations:
- Large-scale examples such as galaxies or the universe relate to assertions that cannot be verified through direct human experience.
- Similarly, claims about subatomic particles, like bosons and gluons, require specialized equipment for verification and are also beyond direct human experience.
- A simple claim such as the existence of milk in a refrigerator is verifiable by direct observation.