In short
Assertions are management's implicit or explicit representations about the recognition, measurement, presentation and disclosure of items in the financial statements. Auditors use them to consider the types of misstatement that could occur.
Key takeaways
- For classes of transactions: occurrence, completeness, accuracy, cutoff and classification.
- For account balances: existence, rights and obligations, completeness, and accuracy, valuation and allocation.
- Direction of testing matters: records to evidence tests existence or occurrence; evidence to records tests completeness.
Where it's tested
AUD: Evidence: Types & Procedures — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
An auditor selects recorded sales transactions from the sales journal and examines the related shipping documents and customer orders. This procedure primarily tests which assertion?