1.3 - Financial Statement Assertions

Question 1

Define financial statement assertions

Answer 1

Things that a company is saying is true when it presents its financial statements. The claims or assumptions management make about the financial information

Question 2

What must the auditor identify risks for?

Answer 2

Both the specific assertions (e.g classes of transactions) and for the financial statements as a whole

Question 3

What are the six assertions used by the auditor about classes of transactions and events, and related disclosures, for the period under audit?

Answer 3

• occurrence
• accuracy
• cut-off
• completeness
• classification
• presentation

Question 4

What are the six assertions used by the auditor about account balances, and related disclosures at the period end?

Answer 4

• existence
• rights and obligations
• accuracy, valuation and allocation
• completeness
• classification
• presentation