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There are 5 main Assertions :
1- Presentation
2- Existence & Occurrence
3- Rights & Obligations
4- Completeness
5- Valuation
In Auditing, a company's financial statements, where the auditors rely upon a variety of assertions regarding the business. The auditors test the validity of these assertions by conducting a number of audit tests;
The following five items are classified as assertions related to transactions, mostly in regard to the income statement:
Account balance assertions. The following four items are classified as assertions related to the ending balances in accounts, and so relate primarily to the balance sheet:
Presentation and disclosure assertions. The following five items are classified as assertions related to the presentation of information within the financial statements, as well as the accompanying disclosures:
Assertions or management assertions in audit or auditing simply means what management claims. For example, if a management states that internal controls are effective then it is a claim or assertion made by management.
Assertions and International Standard on Auditing (ISA)
ISA points out that in preparing financial statements make direct or indirect assertions regarding the recognition, measurement, presentation of elements of financial statements and disclosures made in the financial statements. If these assertions are correct then financial statements will automatically be reliable.
ISA categorizes the different assertions in three categories which are further classified as follows:
1. Assertions about classes of transactions:
A. Occurrence: transactions and events so recorded in the financial statements actually occurred and relates to the same period.
B.Completeness: all such transactions and events that required recording have been recorded
C.Accuracy: transactions and ancillary information have been recorded with accurate amounts
D.Cutoff: only those transactions and events have been recorded that pertains to the accounting period under consideration
F.Classification: transactions and events have been recorded in the related accounts properly