During audit of the financial statements, the auditors are concerned with the verification and determination of which one of the following items?

Question breakdown

Tests

Financial statement audit verification objectives

Difficulty

Medium

Key idea: In a financial statement audit, auditors verify that recorded items carry the correct date, are accurate and are reliable.

How to reach the answer

1. The stem asks what auditors verify and determine about recorded items.
2. Verification concerns items that actually exist and are recorded, not judgments such as feasibility.
3. Date relates to cutoff and the correct period, while accuracy and reliability support fair presentation.
4. Only option B lists three attributes that can be verified, so B is the answer.

Each option

• AIncorrect. Feasibility is a forward-looking business judgment, not a verification objective.
• BCorrect. Date, accuracy and reliability are the attributes auditors test in recorded items.
• CIncorrect. Policies are reviewed for context but are not verified as items.
• DIncorrect. A cycle is a way to organize the audit, not an attribute that gets verified.

Common trap: Option C looks right because value and reliability are relevant, but policies are not verified as recorded items.

In practice: Cutoff testing and accuracy checks on environmental liabilities or remediation accruals rely on exactly these attributes.

Remember: Verification targets attributes that can be tested: correct date, accuracy and reliability.

Drafted with AI assistance and checked against the answer key.