1. Finacial Statement Assertions

Question 1

The auditor considers these assertions for the various transaction classes, financial statement accounts and disclosures. When all assertions have been made for an account he account is considered to be what?

Answer 1

In conformity with generally accepted accounting principles

Question 2

Define relevant assertions

Answer 2

Assertions that have meaningful bearing on whether an account balance, transaction or disclosure is fairly stated

Question 3

In transaction classes, defined occurrence.

Answer 3

Transactions and events that have been recorded have occurred and pertain to the entity

Question 4

In transaction classes, define completeness.

Answer 4

I’ll transactions and events have been recorded

Question 5

In transactions classes, defined accuracy.

Answer 5

Amounts and other data relating to recorded transactions have been recorded appropriately

Question 6

In transaction classes, define cut off

Answer 6

Transactions and events have been recorded in the correct accounting.

Question 7

In transaction classes, define classification

Answer 7

Transactions and events have been recorded in the proper accounts

Question 8

In account balances, defined existence

Answer 8

Assets, liabilities, and equity interests exist

Question 9

In account balances, define rights and obligations.

Answer 9

The entity holds or controls the rights to assets, and liabilities are they obligations of the entity

Question 10

In account balances, define completeness

Answer 10

All assets, liabilities, and equity interests have been recorded

Question 11

In account balances, defined valuation and allocation

Answer 11

Assets, liabilities, and equity interests are included at appropriate amounts.

Question 12

In disclosures, defined occurrence.

Answer 12

Disclosed events and transactions have occurred.

Question 13

In disclosures, define rights and obligations.

Answer 13

Disclosed events pertaining to the entity.

Question 14

In disclosures, defined completeness.

Answer 14

All disclosures that should have been included have been included.

Question 15

In disclosures, defined accuracy and valuation.

Answer 15

Information is disclosed fairly and at appropriate amounts.

Question 16

In disclosures, define classification and understandability.

Answer 16

Information is presented and described clearly.

Question 17

Management is responsible for the fair presentation the financial statements. Management implicitly or explicitly make assertions related to what three things?

Answer 17

1 Account balances at year-end
2 classes of transactions and events
3 presentations and disclosures

Question 18

Name the five assertions for transaction classes

Answer 18

Occurrence, completeness, accuracy, cut off, classification

Question 19

Name the four assertions for account balances

Answer 19

Existence, rights and obligations, completeness, valuation and allocation.

Question 20

Name the five assertions for disclosure.

Answer 20

Occurrence, rights and obligations, completeness, accuracy and valuation, classification and understandability