Question

What is the objective of the PCaOB audit related to the completeness assertion?

1) To establish evidence that assets, liabilities, and equities actually exist
2) To determine the accuracy of financial statements
3) To assess the effectiveness of internal controls
4) To identify potential fraud or errors

Answer 1

The objective of the PCaOB audit related to the completeness assertion is to establish evidence that assets, liabilities, and equities actually exist.

Step-by-step explanation:

The objective of the PCaOB (Public Company Accounting Oversight Board) audit related to the completeness assertion is to establish evidence that assets, liabilities, and equities actually exist. This means verifying that all relevant items have been recorded and disclosed accurately in the financial statements. The completeness assertion focuses on ensuring that nothing important has been omitted or left out in the financial reporting.

For example, in an audit, the auditor may examine supporting documents such as bank statements, purchase agreements, and invoices to verify the existence of assets and liabilities. By doing so, they can provide reasonable assurance that the financial statements are complete and all material items have been recorded.

In summary, the objective of the PCaOB audit related to the completeness assertion is to establish evidence and provide assurance that all relevant items are included in the financial statements and nothing important has been omitted.