Assertions Flashcards
how to test for completeness in Accounts payable?
Cutoff procedures to verify recorded in the correct period
How to test for existence in Accounts payable?
Confirmation (not usually needed)
How to test for valuation in Accounts payable?
foot the AP listing, agree vendor statements to vendor accounts.
How to test for Rights & obligations with Accounts Payable?
Look over the voucher package and verify the AP amounts are owed by the entity
How to test for completeness in Accounts Receivable?
Cutoff procedures to make sure sales are recorded in correct period.
How to test for existence in Accounts Receivable?
Confirmations of AR balance
How to test for Rights and obligation in Accounts Receivable?
Look for pledged collateral as debt
How to test completeness in Inventory?
Test physical inventory thought cutoff sales procedures.
How to test Rights and obligation in inventory?
view documents regarding inventory used as collateral as debt or any contingencies
How to test valuation for inventory?
inquiry of obsolete or damaged goods, examine vendor invoices, perform inventory price test, analytical procedures
How to test completeness for investments?
apply analytical procedures
How to test existence for investments?
confirmation with third parties, examine securities on hand (if no third party used)
How to test completeness in Fixed assets?
Search the repairs and maintenance account for items that should be capitalized that were expensed.
How to test existence in Fixed Asset?
Test fixed asset additions and dispositions. Trace proceeds of dispositions to cash receipts journal. For additions check new documentation
How to test valuation in fixed assets?
Recalculate depreciation expense and inquire about any impairments
How to test completeness in current liabilities and liabilities?
search for unrecorded liabilities with cutoff procedures
How to test existence for current liabilities and liabilities?
Confirm debt balance
How to test valuation for current liabilities and liabilities?
analytic procedures to test reasonableness of interest expense
How to test rights and obligation for fixed assets?
verify any recorded PP&E as collateral for debt.
How to test completeness for Stock?
Review the board minutes for new debt agreements
How to test valuation for stock?
Recompute any interest payable and amortization of premiums and discounts, review the propriety of any direct entities retained earnings.
How to test valuation for accounts receivable?
by ensuring that credit approval is obtained before goods are shipped to customers. This ensures that collectible of receivables will be achieved.
