SCENARIO: After reviewing the balance sheet and corresponding documentation, Nick found that the inventory balance has increased
significantly over the prior year. Nick is concerned that not all of the inventory items that the client claims they have per the accounting records are actually in the warehouse. Nick is concerned about the _____________________ of the inventory balance.
Based on the information provided within the question it seems that Nick is concerned about the Existence or Occurrence of the inventory balance. This is an assertion that tries to verify if certain assets exist and if the transactions that have been recorded actually happened. Since Nick believes that the inventory balance increase seems suspicious he is concerned that there may be fraud or a mistake in the records, therefore he may have to go to the inventory and check for himself.
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