The FS consists of many accounts which may include the following:
Cash
Trade Receivables
Sales
Payroll Expense
Each FS account has FS assertions implicit in the financial statements.
Financial statement assertions are representations of management, explicit or otherwise, embodied in the financial statements as used by the auditor to consider the different types of potential misstatements that may occur.
Financial Statement Assertions are categorized as:
Balance Sheet
Existence
Completeness
Rights and Obligations
Valuation
Presentation and Disclosure
Income Statement
Occurrence
Completeness
Measurement
Presentation and Disclosure
*based on ISA
During an audit, we determine which FS assertions are relevant to the significant accounts and disclosures.We design and perform substantive procedures at the assertion level to identify material misstatements and, if found, to quantify their effect in the FS.
Financial Statement Assertions
*Based on PSA
Classes of transactions and events for the period under audit:
a. Occurrence
b. Completeness
c. Accuracy
d. Cut-off
e. Classification
Account balances at the period ended:
a. Existence
b. Rights and Obligations
c. Completeness
d. Valuation and Allocation
Presentation and Disclosure:
a. Occurrence and Rights and Obligations
b. Completeness
c. Classification and Understandability
d. Accuracy and Valuation
