Audit Assertions: Everything you need to know about it?
According to ISA 315(updated), the Infusion of information, measurement, and representation of information with a designed framework having relation to recognition is called audit assertions. It is an essential part to prevent confusion for a hectic audit process.
Benefits of Audit Assertions
The core purpose of assertions is to avoid misstatement while representing the material. It is not the only benefit but you can save your time of identifying mistakes. It is important to have a look at some assertions mentioned in ISA 315(Version 2019). More information on these steps creates more understanding to get the best results.
1. Occurrence
Describing all the events and transactions done in the accounting is called Occurrence. It is essential to describe the relationship between these events and transactions with the identity to authenticate your assertion.
2. Completeness
Mentioning all the transactions and events is the only way to clear assertions. Any small or big transaction of even some digits can be confusing when not included in the accounting.
3. Accuracy
Accuracy works like a key to success when we refer to the audit assertions. This needs complete attention to prevent any omission during the process. Here is the need to check whether all the transactions and factors are recorded properly or not.
4. Cut-Off
This states that all related events are mentioned in the correct period whether its revenue or any other. Association with the wrong time can decrease the efficiency of assertion.
5. Classification
Classification is all about mentioning the details associated with the financial account at the right place. You can escape from confusion from this small step.
6. Presentation
Right representation of any event and transaction is essential for the accounting record. It also shows that all the information and disclosures mentioned in the financial statement are recorded under the deigned framework.
Account Balance Assertions
This Assertion refers to account balance information recorded at the end. Some related assertions are mentioned below to understand this completely.
Existence
This is the first thing to observe whether its revenue, equity and, liabilities are in the financial statements. It shows the actual transactions and events recorded in accounting.
Rights and Obligations
Rights and obligations mention the entity that holds the power of using all the assets with full control. This is a clear visualization of liabilities, revenues and, other important factors in the financial statement. This also clears the involvement of any third party in it.
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