Assertion Audit

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ASSERTION

-Audit assertion are those charged with governance of an entity are responsible for ensuring the financial report gives true and fair view of entity and the operation of its.

-Management make assertions abt each account and related disclosures in the notes. -Assertion statement made by management regarding the recognition, measurement, presentation and disclosure of items include in the financial report.

auditor use assertion for transaction, account balance and presentation and disclosure when assessing the risk of material misstatement and when designing their audit procedures. ASA 315(ISA 315) USED BY AUDITOR.*This means that auditors need to gather sufficient appropriate evidence about each assertion for each transaction and account balance, or disclosure*

Transaction related audit assertion
occurrence: transaction and event that have been recorded happened and pertain to the entity. most important when there is a risk of overstatement-EX: revenue

completeness: all transaction, events, assets, liabilities and equity items that should have been recorded have been recorded. Most important when there is a risk of understatement

accuracy: amount and other data relating to recorded transactions and events have been recorded appropriate. Most important where there is higher risk of inaccuracy. EX: complex foreign exchange transactions.

cut-off:Transactions and events have been recorded in the correct accounting period. Most important for transactions near year-end.

Classification: Transactions and events have been recorded in the proper account. Most important for material account

Balance related audit assertion:
Existence: recorded assets, liabilities and equity interest exist . Most important where there is risk of overstatement. EX: assets.

Right and obligation:The entity holds or controls the rights of the assets and liabilities are the obligation of the entity. Most important where there is risk that items...
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