Assertions Summary of FS Class Flashcards
Completeness (NCA)
Obtain schedule
Agree to records
Existence (NCA)
Inspect assets
Valuation (NCA)
Validate valuer, insurance policies
Reperform calculations
Valuation-depreciation (NCA)
Review depreciation rules
Compare ratios of depreciation
Reperform calculations
Rights and obligations (NCA)
Obtain documents (e.g. registration documents, certificate from solicitors, leases)
Classification (NCA)
Review IAS 16
Additions (NCA)
Review capitalisation of expenditure
Scrutinise NCA ledger and general ledger
Inspect non-current asset accounts
Disposals (NCA)
Recalculate disposal
Verify documentation
Reasonableness of proceeds
Completeness (inventory)
Trace test counts
Compare gross profit percentage
Third-party locations then physically inspect
Existence (inventory)
Observe physical inventory count
Rights and obligations (inventory)
What’s included in the financial statements
Cut-off (inventory)
GDNs and GRNs
Classification (inventory)
Distinguish between raw materials, work-in-progress and finished goods
Completeness (Receivables)
Aged receivables listing and recast total
Obtain breakdown of trade receivables figure
Sample of GDNs to relevant sales invoice
Existence (Receivables)
Inspect customer correspondence
Review monies
Sample of balances
Accuracy and valuation (Receivables)
Compare receivables collection period
Examine credit notes
Agree monies received post year end from receivables - balance is recoverable
Rights and obligations (Receivables)
Review monies received post year end from receivables - balance is due to audit client
Vouch outstanding balance back to sales invoices and GDNs
Inspect responses from direct confirmation
Completeness (Revenue)
Obtain breakdown of revenue
Compare gross product percentage
Occurence (Revenue)
Vouch sales invoices back to documentation
Accuracy (Revenue)
Compare prices to authorised price list
Test discounts have been applied
Completeness and existence (Bank)
Obtain documentation and explanations
Trace cheques
Compare cash books and bank statements and match items
Valuation (Bank)
Reperform calculations
Lodgments
Contra items
Verify bank balances
Rights and obligations (Bank)
Determine whether bank accounts are subject to any restrictions within management
Classifications (Bank)
Consider legal right of set-off as overdrafts against positive bank balances
Ensure disclosures for bank are complete
Completeness and existence (Payables and accruals)
Compare to previous years
Rights and obligations (Payables and accruals)
Vouch selected amounts to documentation
Valuation (Payables and accruals)
Recalculation
Classification (Payables and accruals)
Review
Existence (non-current liabilities)
Obtain direct confirmation from banks
Rights and obligations (non-current liabilities)
Review direct confirmation letters
Completeness (non-current liabilities)
Obtain breakdown of liabilities, compare to prior years
Review board minutes and cash book
Accuracy and valuation (non-current liabilities)
Calculation
Classification (non-current liabilities)
Does it match to accounting standards
Existence (directors’ emoluments)
Agree director’s enoluments in FS to schedule of emoluments
One-off payments
Rights and obligations (directors’ emoluments)
Verify emoluments
Completeness (directors’ emoluments)
Review board meetings
Review cash book during the year
Confirm with directors
Accuracy and valuation (directors’ emoluments)
Recalculate
Classification and presentation (directors’ emoluments)
Obtain 3rd party documentation (copy of returns from tax authorities, local law)
