Question

In performing your audit for a privately-held firm your inquiries have yielded that one of the company's owner's primary motivations is to pay the least amount of income tax that is possible. Based on this observation which audit objective for ending inventory would the auditor be most concerned about ascertaining?

A) Completeness
B) Accuracy
C) Rights and obligations
D) Existence

Answer 1

The auditor would be most concerned about ascertaining the accuracy of the ending inventory in relation to the owner's motivation to pay the least amount of income tax.

Step-by-step explanation:

The primary objective that the auditor would be most concerned about ascertaining, based on the owner's motivation to pay the least amount of income tax possible, is Accuracy in relation to ending inventory.

Accuracy refers to the correctness and integrity of financial information. In this case, the auditor would need to ensure that the ending inventory figure is accurately stated and reflects the true value of the company's inventory.

This is important because an incorrect or misrepresented ending inventory value could result in inaccurate income tax calculations and potentially lead to tax evasion or incorrect reporting of the company's financial position.