Assertions Flashcards
What assertions are NOT relevant to transactions, events, and related disclosures
R&O
What assertions are NOT relevant to account balances and related disclosures
Cutoff
What assertion is performed through tracing, analytical review, and observation?
Completeness
What assertion is performed through inspection, footing, independent recalc, and reconciliation
VAA
What assertion is performed through confirmation, observation, inspection, examination, and vouching?
Existence & Occurrence
What assertion is performed through inspection?
R&O
What assertion is performed through inspection, review, and inquiry?
Understandability
What is the objective of TOD performed as a substantive test?
Detect material misstatement in FS
COVEUP
Transactions
CVERUP
Balances
COVEUP: Transactions and events have been recorded in the correct accounting period
Cutoff
COVEUP: All transactions and events that should have been recorded have been and disclosed
Completeness
COVEUP: Amounts and other data relating to recorded transactions and events have been recorded and disclosed properly
VAA
COVEUP: Transactions and events that have been recorded have occurred and pertain to the entity
E&O
COVEUP: Transactions and events have been recorded in the proper accounts, information is appropriately presented and described, and disclosures are clearly expressed
Understandability
When auditing revenue transactions, the auditor focuses on _________ rather than _________ because revenues are more likely to be _________
E&O, completeness, overstated
When auditing expense transactions, the auditor focuses on _______ because the expenses are more likely to be _________
Completeness, understated
CVERUP: All assets, liabilities, and equity interests that should have been recorded have been recorded and all appropriate disclosures have been made
Completeness
CVERUP: Assets, liabilities, equity, and disclosures are recorded fairly and at appropriate amounts, and any resulting allocation adjustments are approriately recorded and disclosed
VAA
CVERUP: Assets, liabilities, and equity exist
E&O
CVERUP: Entity holds or controls the rights to assets, and liabilities are the obligation of the entity
R&O
CVERUP: Financial info is appropriately presented and described and disclosures are clearly expressed
Understandability
When auditing asset balances, auditor generally focuses on testing the _______, rather than ________, because assets are more likely to be _______.
Existence, completeness, overstated
When auditing liability balances, auditor generally focuses on testing the _______, because liabilities are more likely to be ______
Completeness, understated
When would you use confirmation?
E&O
When would you use footing, cross-footing, and recalc?
VAA
When would you used inquiry?
Understandability
When would you use vouching?
E&O
When would you use Examination?
Existence
When would you use inspection?
Existence, R&O, Understandability
When would you use analytical procedures?
Completeness
When would you use reconciliation?
Existence, VAA
When would you use observation?
Existence
When would you use tracing?
Completeness
Tracing
Source documents –> FS
Vouching
FS –> Source documents
Completeness tests for _____
Understatement
Existence tests for ____
Overstatement
