1. MeetingWithITTR&CTeam Risk Assessment and Financial
Statement Assertions March 17th, 2015 R&C/ ITT-SAP: ; Luis
Torres Garcia; Yannick Rostand Kounga Taptue; David Vincent; Joseph
Siegfried; Irynn Chay; Mirza Zeeshan Ahmed; Randolph Parman;
Viswanathan Murugesh; Steven Diep; Naveed Ahmed
2. What is Financial Statement Assertions? Financial statement
assertions: A set of information that the preparer of financial
statements is providing to another party. Financial statements
represent a very complex and interrelated set of assertions. Are
Managements explanation regarding the recognition, measurements,
presentation and disclosure of information in the financial
reports. Types of Financial Statement Assertions: There are
basically different financial statement assertions that the
auditors collect to justify each and every item in the financial
statement. five
3. 5 4 3 2 1 Existence: The assertion on existence is made to
check whether the specified assets and liabilities are present at
the given date. It is also required to check that the transactions
that are recorded took place at the specified date. Completeness:
Checking completeness of a financial statement is to analyze
whether all the transactions that are already given in the
financial statement are correctly included. Valuation: Valuation
basically checks whether the different components of the financial
statement have been included in the right proportion. The
components are assets, liabilities, expense and revenue. Rights and
Obligations: This is to check whether the assets that are included
in the financial statement are the rights and the liabilities are
the obligations of the company. Presentation and Disclosure: This
assertion is to ensure whether the items in the financial
statements are classified in the right way. It is important to
check that the account balance is calculated as well as disclosed
properly. FiveFinancialStatementAssertions
4. Management Assertions: Auditors decompose the broad
assertions into a detailed set of statements referred to as
management assertions, separated into three categories: CUTOFF: The
transactions have been recorded in the correct accounting period.
AUTHORIZATION: All transactions were properly authorized.
COMPLETENESS: All transactions that should have been recorded are
recorded. ACCURACY: The transactions were recorded at the
appropriate amounts. This is not an assertion in Voyager.
CLASSIFICATION: The transactions have been recorded in the proper
accounts. Item 1 Item 2+3 Item 4 Item 5 Item 6 OCCURRENCE: The
transactions recorded actually took place. Set 1 Transactions Set 2
Accounts Balance: Set 3 Presentation and Disclosure: Transactions
& Events
5. Management Assertions: Auditors decompose the broad
assertions into a detailed set of statements referred to as
management assertions, separated into three categories: VALUATION
AND ALLOCATION: Assets, liabilities and equity balances are
included in the financial statements at appropriate amounts and any
resulting valuation or allocation adjustments are appropriately
recorded. COMPLETENESS: All assets, liabilities and equity balances
that should have been recorded have been recorded. RIGHTS AND
OBLIGATIONS: The entity holds or controls the rights to its assets
and owes obligations to its liabilities. Item 1 Item 2 Item 3 Item
4 EXISTENCE: Assets, liabilities and equity balances exist. Set 1
Transactions Set 2 Accounts Balance: Set 3 Presentation and
Disclosure: Accounts Balance as of period end
6. Management Assertions: Auditors decompose the broad
assertions into a detailed set of statements referred to as
management assertions, separated into three categories:
CLASSIFICATION AND UNDERSTANDABILITY: Financial statements are
appropriately presented and described, and information in
disclosures is clearly expressed. COMPLETENESS: All disclosures
that should have been included in the financial statements have
been included. RIGHTS AND OBLIGATIONS: The transactions pertained
to the entity. ACCURACY AND VALUATION: Financial and other
information is disclosed fairly and at appropriate amounts. Item 1
Item 2 Item 3 Item 4 Item 5 OCCURRENCE: The transactions have
occurred. Set 1 Transacti ons Set 2 Accounts Balance: Set 3
Presentation and Disclosure:
7. 1. "Auditing Standard No. 15.11". http://pcaobus.org/.
Public Company Accounting Oversight Board. Retrieved 15 March 2015.
2. "Auditing Standard No. 15.2". http://pcaobus.org/. Public
Company Accounting Oversight Board. Retrieved 15 March 2015. 3.
"INTERNATIONAL STANDARD ON AUDITING 315 (REVISED) A124".
http://www.ifac.org/. International Federation of Accountants.
Retrieved 15 March 2015. 4. "AU Section 326". aicpa.org. American
Institute of Certified Public Accountants. Retrieved 15 March2015.
http://www.aicpa.org/Research/Standards/AuditAttest/DownloadableDocuments/AU-00326.pdf
5.
http://finance.mapsofworld.com/financial-report/statement/assertions.html.
Retrieve on March 17 2015.