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Explain on how an auditor can use assertions in generating audit evidence?

      

Explain on how an auditor can use assertions in generating audit evidence?

  

Answers


Wilfred
When preparing financial statements the management makes certain implicit or explicit assertions
about the financial affairs of the company.
Consequently, when the auditor is obtaining evidence from a substantive procedure, he is
concerned about testing or substantiating the truth of these assertions. The assertions are
categorized as follows;
1. Assertions about hinting of transactions and events for the period under audit i.e.
•• Occurrence transaction and events that have been recorded have occurred and pertain to the entity.
•• Completeness
•• Cut off. Transactions and events have been recorded in the appropriate accounting period
•• Accuracy Amounts and other data relating to the recorded transactions have been recorded appropriately.
•• Classification. Transactions and events have been recorded in the correct period

2. Assertions about account balances at the year end.
•• Existence. Assets or liabilities exist at a given date
•• Rights and obligations
•• completeness
•• valuation and allocation

3. Assertions about presentation and disclosure.
•• Occurrence and rights and obligation. Disclosed events and transactions and other matters have occurred and pertained to the entity
•• Completeness All disclosures that should have been included e.g. compositions of director’s fees.
•• Measurement and valuation. Financial and other information are disclosed fairly and at appropriate amounts
•• Classification and understandability. Financial information is appropriately presented and described, and disclosures are clearly expressed
The auditor may use the assertions described above or may express them differently provided all aspects described above have been covered .
Wilfykil answered the question on April 11, 2019 at 13:19


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