Chapter 5

Question 1

Assertion

Answer 1

Management representation, explicit or implied, regarding items in the financial statements and notes.

Question 2

Assertions about classes of transactions

Answer 2

Occurrence
Completeness
Accuracy
Cutoff
Classification
Presentation

Question 3

In the context of assertions about classes of transactions and events for the period under audit auditors considering occurrence, gather evidence to verify that

Answer 3

all transactions and events that have been recorded and the financial statements are not understated or overstated because transactions have been omitted.

Question 4

The completeness assertion relates to

Answer 4

All transactions and events that should have been recorded have been recorded

Question 5

The cutoff assertion deals with

Answer 5

Transactions and events have been recorded in the correct accounting period.

Question 6

Auditors gathering evidence that transactions and related disclosures have been recorded at appropriate amounts consider

Answer 6

Accuracy

Question 7

Assertions about Account Balances

Answer 7

Existence
Rights and Obligations
Completeness
Accuracy, valuation, and allocation
Classification
Presentation

Question 8

When considering classification

Answer 8

auditors gather evidence that transactions and events have been recorded in the proper accounts

Question 9

When considering existence

Answer 9

Auditors search for evidence to verify that asset, liability, and equity items on the balance sheet actually exist.

Question 10

When considering rights and obligations

Answer 10

Auditors gather evidence to verify recorded assets are owned by the entity and recorded liabilities represent commitments of the entity.

Question 11

Auditors who are searching for evidence that assets, liabilities, and equity interests have been included in the financial statements at appropriate amounts and allocated to the correct GL accounts consider

Answer 11

valuation and allocation