Question

Auditors are more concerned with the occurrence assertion for revenues than the completeness assertion because

a. Clients are more likely to overstate than understate revenues.
b. Clients are more likely to understate than overstate revenues.
c. It is difficult to determine when services have been performed.
d. The allowance for doubtful accounts often is understated.

Answer 1

Auditors are more concerned with the occurrence assertion for revenues than the completeness assertion because clients are more likely to overstate than understate revenues.

Step-by-step explanation:

Auditors are more concerned with the occurrence assertion for revenues than the completeness assertion because clients are more likely to overstate than understate revenues.

When auditors focus on the occurrence assertion for revenues, they are primarily concerned with ensuring that revenues recorded by the client actually represent valid transactions that have taken place. This is important because clients may be tempted to overstate their revenues in order to make their financial performance look better than it actually is.

On the other hand, auditors are less concerned with the completeness assertion for revenues because clients are generally more likely to understate revenues. Understating revenues can be advantageous for clients who want to pay less taxes or hide potential financial issues.