An auditor selects 20 assets from the Fixed Asset Register and physically inspects them, but 2 assets cannot be located. What is the most likely conclusion?

Correct answer: B) Non-current assets are overstated because fictitious or disposed-of assets are still on the register.

Explanation

If an asset is in the records but not physically present, the record is overstating the actual resources owned by the company (Existence failure).