The Professional Standards Identify Five Categories of Assertions Made by Management

question 64

Short Answer

The professional standards identify five categories of assertions made by management that are contained in the financial statements. The categories of assertions identified by the profession are:A.
Existence or occurrence
B.Completeness
C.Rights and obligations
D.Valuation or allocation
E.Presentation and disclosure
REQUIRED: Using the letters given above, indicate the assertion that relates to each listed audit objective.
1.All sales transactions that have been recorded actually occurred during the
period.
2.The details of sales transactions support their presentation in the financial
statements.
3.All sales are correctly valued at their historical cost and correctly journalized,
summarized, and posted.
4.Accounts receivable at the balance sheet date represents legal claims of the entity
on customers for payment.
5.All sales transactions that occurred during the period have been recorded.

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Definitions:

Evolutionary Approach

An approach in psychology that examines human thoughts and behaviors through the lens of natural selection and adaptation.

Reliable And Ethical

pertains to actions, systems, or individuals that consistently perform as expected while adhering to moral principles and values.

Conscientiousness

Conscientiousness is a personality trait characterized by organization, dependability, and a strong sense of duty.

Nature And Nurture

A debate concerning the relative importance of an individual's innate qualities versus personal experiences in determining or causing differences in physical and behavioral traits.