Assertions

Question 1

Principal objectives in auditing cash

All cash on the balance sheet is held by the entity or by others (for example, a bank) for the entity.

Answer 1

E

Question 2

Principal objectives in auditing cash

All cash owned by the entity at year end is included in the balance sheet.

Answer 2

C

Question 3

Principal objectives in auditing cash

Cash is stated at its realizable value.

Answer 3

V&A

Question 4

Principal objectives in auditing cash
The entity owns, or has legal rights to, all the cash on the balance sheet at year end. All cash is free from restrictions on use, liens, or other security interests, or, if it is not free, that such restrictions, liens, or other security interests are identified.

Answer 4

Rights and obligations (R&O)

Question 5

Principal objectives in auditing cash
Cash is properly classified, described, and disclosed in the financial statements, including the notes, and disclosures of any of the above-mentioned restrictions on use, etc., are made as required by application of an appropriate accounting framework (for example, International Financial Reporting Standards or Accounting Standards for Private Enterprises).

Answer 5

Classification (Cl), classification and understandability (C&U)

Question 6

Principal objectives in auditing trade receivables

All receivables on the balance sheet are real claims of the entity.

Answer 6

E

Question 7

Principal objectives in auditing trade receivables

All real claims of the entity for amounts receivable are included on the balance sheet.

Answer 7

C

Question 8

Principal objectives in auditing trade receivables
Receivables are carried at their net realizable (collectable) value (that is, the gross receivables are properly stated with appropriate allowances provided for uncollectable accounts, discounts, returns, warranties, and similar items).

Answer 8

V

Question 9

Principal objectives in auditing trade receivables
The entity owns, or has legal right to, all the receivables on the balance sheet at year end. All receivables are free from liens, pledges, or other security interests or, if not, such liens, pledges, or other security interests are identified.

Answer 9

A

Question 10

Principal objectives in auditing trade receivables
Receivables are properly classified, described, and disclosed in the financial statements, including the notes, in conformity with prescribed accounting principles (IFRS and ASPE).

Answer 10

Classification (Cl), classification and understandability (C&U)

Question 11

Principal objectives in auditing inventory

All inventory on the inventory listing is included in the financial statements.

Answer 11

E

Question 12

Principal objectives in auditing inventory

All inventory owned by the entity at year end is included on the balance sheet.

Answer 12

C

Question 13

Principal objectives in auditing inventory
Inventory is carried at the lower of cost or net realizable value. Ensure that the cost and net realizable value determinations are appropriate, including adequate provisions for excess, slow-moving, obsolete, and damaged goods, and for losses on purchase and sale commitments.

Answer 13

V&A

Question 14

Principal objectives in auditing inventory
The entity owns, or has legal right to, all of the inventory on the balance sheet. All inventory is free of liens, pledges, and other security interests or, if not, such liens, pledges, or other security interests are identified.

Answer 14

Rights and obligations (R&O)

Question 15

Principal objectives in auditing inventory
Inventory is properly classified, described, and disclosed in the financial statements, including the notes, in conformity with prescribed accounting principles (IFRS).

Answer 15

Classification (Cl), classification and understandability (C&U)

Question 16

Principal objectives in auditing property, plant, and equipment
All PPE on the balance sheet (including assets leased under finance leases) are held by the entity or by others for the entity.

Answer 16

E

Question 17

Principal objectives in auditing property, plant, and equipment
All PPE owned or leased under finance (capital) leases by the entity at year end are included on the balance sheet.

Answer 17

C

Question 18

Principal objectives in auditing property, plant, and equipment
PPE are carried at the appropriate amount (taking into account accumulated depreciation, amortization, or impairment). The cost of the plant and equipment is allocated to the appropriate accounting periods in a systematic and rational manner. The written-down value of the PPE is expected to be recoverable through future use. PPE assets held for disposal are carried at the appropriate value.

Answer 18

V&A

Question 19

Principal objectives in auditing property, plant, and equipment
The entity owns, or has legal right to, all the PPE on the balance sheet at year end. All PPE assets are free from liens, pledges, security interests, and restrictions or, if not, such liens, pledges, security interests, and restrictions are identified and disclosed (if necessary).

Answer 19

Rights and obligations (R&O)

Question 20

Principal objectives in auditing property, plant, and equipment
PPE and related accounts are properly classified, described, and disclosed in the financial statements, including the notes.

Answer 20

Classification (Cl), classification and understandability (C&U)

Question 21

Principal objectives in auditing payables
All accounts payable on the balance sheet are real debts that are payable to suppliers or other creditors of the entity for goods received or services performed.

Answer 21

E

Question 22

Principal objectives in auditing payables

All accounts payable owed by the entity at year end are included on the balance sheet.

Answer 22

C

Question 23

Principal objectives in auditing payables

Accounts payable are stated at the amounts owed at year end.

Answer 23

V&A

Question 24

Principal objectives in auditing payables
The accounts payable on the balance sheet represent obligations of the entity at year end. The accounts payable are not secured by liens on assets, security interests, or other collateral unless otherwise indicated.

Answer 24

Rights and obligations (R&O)

Question 25

Principal objectives in auditing payables

Accounts payable are properly classified, described, and disclosed in the financial statements, including the notes.

Answer 25

Classification (Cl), classification and understandability (C&U)

Question 26

Principal objectives in auditing revenue

ll sales included in the income statement represent the exchange of goods or services with customers for cash or other consideration during the period.

All other revenues included in the income statement for the period have accrued to the entity at year end.

Revenues applicable for future periods have been deferred.

Answer 26

Occurrence (O)

Question 27

Principal objectives in auditing revenue

All sales and other revenues that accrued to the entity during the period are included in the income statement.

Answer 27

C

Question 28

Principal objectives in auditing revenue

Sales and other revenues are stated at the appropriate amounts.

Answer 28

Accuracy and cut-off (A&CO)

Question 29

Principal objectives in auditing revenue
Sales and other revenues are properly classified, described, and disclosed in the financial statements, including the notes.

Answer 29

Classification (Cl), classification and understandability (C&U)

Question 30

Principal objectives in auditing costs and expenses
All costs and expenses in the income statement are properly supported as charges against the entity in the period. Costs and expenses applicable to future periods are carried forward as inventory, prepaid expenses, deferred charges, or property, plant, and equipment.

Answer 30

O

Question 31

Principal objectives in auditing costs and expenses
All costs related to the current period’s revenues, and all expenses of the current period, are included in the income statement.

Answer 31

C

Question 32

Principal objectives in auditing costs and expenses

Costs and expenses are stated in the income statement at the appropriate amounts.

Answer 32

Accuracy, cut-off (A, CO)

Question 33

Principal objectives in auditing costs and expenses

Costs and expenses are properly classified, described, and disclosed in the financial statements, including the notes.

Answer 33

Classification, classification and understandability (Cl, C&U)