ACCT 3222 Exam 3 Questions with Correct
Answers
assertion
statement or representation, explicit or implicit, made by management regarding the
recognition
FS assertion
claims & assertions, made implicitly or explicitly by management, about the recognition,
measurement, presentation, & disclosure of info in the FS
1. transactions & events & related disclosures (IS focus)
2. account balances & related disclosures (BS focus)
what are the 2 categories of assertions made by management (they are used as a guide during
risk assessment)?
- Completeness
- Proper period cutoff
- Accuracy
- Classification
- Occurrence
- Presentation
what are the 6 assertions under the transactions & events & related disclosures category of
assertions made by management?
,- Completeness
- Accuracy, valuation, & allocation
- Rights & obligations
- Existence
- Presentation
- Classification
what are the 5 assertions under the account balances & related disclosures category of
assertions made by management?
completeness
all transactions, events, disclosures, assets, liabilities, & equity interests that should have
been recorded have been recorded (didn't forget anything)
proper period cutoff
transactions & events have been recorded in the correct (proper) accounting period
accuracy
amounts & other data relating to recorded transactions & events have been recorded
appropriately; related disclosures have been appropriately measured & described
classification
transactions, events, assets, liabilities, & equity interests have been recorded in the proper
accounts
occurrence
transactions & events that have been recorded or disclosed have occurred & pertain to the
entity (no fictitious transactions)
, presentation
transactions, events, assets, liabilities, & equity interests are appropriately grouped & clearly
described, & disclosures are relevant & understandable in the context of GAAP
existence
assets, liabilities, & equity interests exist (no fictitious items)
- existence or occurence
- completeness
- valuation or allocation
- rights & obligations
- presentation & disclosure
what are the 5 assertions for PCAOB standards?
relevant assertion
assertion that has a reasonable possibility of containing a material misstatement that would
cause the FS to be materially misstated &, therefore, has a meaningful bearing on whether the
account is fairly stated
audit program
a listing of details of the audit procedures to be used when testing controls, conducting
detailed substantive audit procedures for each specific account (cash, AR, etc.), & completing
the audit; the finished product of risk assessment/planning phase
audit evidence
Answers
assertion
statement or representation, explicit or implicit, made by management regarding the
recognition
FS assertion
claims & assertions, made implicitly or explicitly by management, about the recognition,
measurement, presentation, & disclosure of info in the FS
1. transactions & events & related disclosures (IS focus)
2. account balances & related disclosures (BS focus)
what are the 2 categories of assertions made by management (they are used as a guide during
risk assessment)?
- Completeness
- Proper period cutoff
- Accuracy
- Classification
- Occurrence
- Presentation
what are the 6 assertions under the transactions & events & related disclosures category of
assertions made by management?
,- Completeness
- Accuracy, valuation, & allocation
- Rights & obligations
- Existence
- Presentation
- Classification
what are the 5 assertions under the account balances & related disclosures category of
assertions made by management?
completeness
all transactions, events, disclosures, assets, liabilities, & equity interests that should have
been recorded have been recorded (didn't forget anything)
proper period cutoff
transactions & events have been recorded in the correct (proper) accounting period
accuracy
amounts & other data relating to recorded transactions & events have been recorded
appropriately; related disclosures have been appropriately measured & described
classification
transactions, events, assets, liabilities, & equity interests have been recorded in the proper
accounts
occurrence
transactions & events that have been recorded or disclosed have occurred & pertain to the
entity (no fictitious transactions)
, presentation
transactions, events, assets, liabilities, & equity interests are appropriately grouped & clearly
described, & disclosures are relevant & understandable in the context of GAAP
existence
assets, liabilities, & equity interests exist (no fictitious items)
- existence or occurence
- completeness
- valuation or allocation
- rights & obligations
- presentation & disclosure
what are the 5 assertions for PCAOB standards?
relevant assertion
assertion that has a reasonable possibility of containing a material misstatement that would
cause the FS to be materially misstated &, therefore, has a meaningful bearing on whether the
account is fairly stated
audit program
a listing of details of the audit procedures to be used when testing controls, conducting
detailed substantive audit procedures for each specific account (cash, AR, etc.), & completing
the audit; the finished product of risk assessment/planning phase
audit evidence
