Practice Test 2

A vendor's response to an accounts payable confirmation request shows a higher balance due from the client than the client's records indicate. This discrepancy, if determined to be a client error, would most likely provide evidence related to which assertion?

A bank confirmation response reveals an undisclosed agreement where inventory is pledged as collateral for a line of credit. The auditor verifies this is a new agreement. After determining this omission is material, the auditor's primary responsibility is to: