Question

An auditor concluded that no excessive costs for idle plant were charged to inventory. This conclusion most likely related to the auditor's objective to obtain evidence about the financial statement assertions regarding inventory, including presentation and disclosure and:

Answer 1

The auditor's conclusion relates to the financial statement assertions regarding inventory, including presentation and disclosure.

Step-by-step explanation:

The auditor's conclusion that no excessive costs for idle plant were charged to inventory is related to the financial statement assertions regarding inventory, including presentation and disclosure.

When auditing inventory, one of the key assertions is the valuation assertion, which requires the auditor to ensure that inventory is valued at the lower of cost or net realizable value.

If excessive costs for idle plant were charged to inventory, it could overstate the value of inventory on the financial statements, resulting in a potential misstatement of inventory presentation and disclosure.