Financial Statement Assertions (1)

Question 1

What are assertions?

Answer 1

Representations, explicit or otherwise show that the financial statements are prepared in accordance with the applicable financial reporting framework

Question 2

How are assertions are used?

Answer 2

By the auditor to consider the different types of potential misstatements that may occur when identifying, assessing and responding to the risks of a material misstatement

Question 3

How must evidence be relevant?

Answer 3

To the particular financial statement assertion the auditor is trying to test

Question 4

What are the two categories?

Answer 4

Assertions about classes of transactions and events and related disclosures

Assertions about account balances and related disclosures at the period end