MODULE :AUE3703
,AUE3761 Exam Study Pack
Contains:
• Comprehensive Revision Summaries
• Comprehensive Questions &
Answers
, 1
Assertions are categorised as follows :
assertions about classes of transactions and events for period under audit e.g. sales, interest received
assertions about account balances at year-end e.g. accounts receivable, property, plant and equipment
assertions about presentation and disclosure e.g. notes that support Statement of Financial Position account
headings, contingent liabilities
Transactions and events : Account balances : Presentation & disclosure :
Occurrence – have all Existence – assets, Occurrence and rights and
occurred and pertain to the liabilities and equity interest obligations – have occurred
entity exist and pertain to entity
Completeness – anything Rights and obligations – Completeness – all has
that should have been entity holds and controls been included
recorded has been recorded rights to assets and Classification &
Accuracy - have been obligations are theirs understandability – is
recorded appropriately Completeness – have all appropriately presented and
Cut-off - have been been recorded described and disclosures
recorded in the correct Valuation and allocation – are clearly expressed
accounting period included at appropriate Accuracy and valuation –
Classification - have been amounts and valuation or disclosed fairly & at
recorded in the correct allocation adjustments are appropriate amounts.
accounts recorded
Assertions for Statement of Financial Position transactions and balances :
Assertion Audit objective - to obtain satisfaction that :
Completeness individual transactions and balances in respect of specific kind of asset or liability are fully
accounted for in the accounting records and financials
Valuation & the balance for the specific asset or liability has been accounted for at the appropriate carrying
allocation value and that the transactions have been correctly allocated to the proper period and recorded
at the proper amount
Existence at a given date the asset or liability did exist and the transactions did take place during the
period in question
Rights & at a given date the asset or liability pertains to the entity and that the transactions did take
obligations place during the period in question
Presentation & the asset or liability was disclosed, classified and described in accordance with the applicable
disclosure legal requirements and generally accepted accounting practice
Assertions for Statement of Comprehensive Income transactions and balances :
Assertion Audit objective - to obtain satisfaction that the specific revenue or expenditure :
Completeness transactions and balances are fully accounted for in the accounting records and financial
statements
Occurrence transactions actually took place during the period in question (occurrence)
transactions pertain to the entity (validity)
Cut-off / accuracy / transactions are recorded in the proper period, are correctly allocated and are recorded at the
classification proper amount
Presentation & balances are disclosed, classified and described in accordance with the applicable legal
disclosure requirements and generally accepted accounting practice (ISA’s & 4th schedule)
, 2
Procedures used by auditor to obtain audit evidence :
Analysis of objectives Procedures of auditor
Completeness :
All transactions were recorded at the time when they - check date on the supporting documentation
took place
All transactions have been reported in the accounting - check sequential numbering of transactions
records
Occurrence :
- investigate existence of valid documents
Transactions reordered in records did actually take - compare entries in accounting records with supporting
place documents
- check that transactions have been authorised
Transactions recorded in the accounting records - check supporting document to ensure that entity was party in
pertain to the entity the transaction
Existence :
- perform physical inspection of assets and compare it with the
Assets and liabilities did actually exist on given date accounting record
- examine supporting documentation
- obtain supporting evidence from 3rd parties
Accuracy / cut-off / classification :
All transactions have been recorded at the proper - compare the amount from supporting documents with the
amount amount in the accounting records
All transactions have been correctly allocated - compare the allocation with the particulars in the supporting
documents
All transactions have been recorded in the correct - compare the date of the transaction with the date on the
financial period supporting documentation
Valuation :
Assets and liabilities have been recorded at an - obtain external valuation or confirmation from 3rd parties
appropriate carrying value
Assess value by physical inspection - compare value by referring to supporting documentation
Assess the reasonable of the amounts claimed for
reduction / increase or write-off of assets
Rights and obligations :
- examine supporting documentation
Assets and liabilities pertain to the entity at a given
date - obtain evidence from 3rd parties in support of rights or
obligations
- obtain sufficient information to make sure that the state of
affairs was applicable at given date
Presentation and disclosure :
Items in financials have been correctly disclosed, - examine financials and obtain satisfaction that there has
classified and described been proper disclosure, classification and description in
terms of the Companies Act and generally accepted
accounting practice
,AUE3761 Exam Study Pack
Contains:
• Comprehensive Revision Summaries
• Comprehensive Questions &
Answers
, 1
Assertions are categorised as follows :
assertions about classes of transactions and events for period under audit e.g. sales, interest received
assertions about account balances at year-end e.g. accounts receivable, property, plant and equipment
assertions about presentation and disclosure e.g. notes that support Statement of Financial Position account
headings, contingent liabilities
Transactions and events : Account balances : Presentation & disclosure :
Occurrence – have all Existence – assets, Occurrence and rights and
occurred and pertain to the liabilities and equity interest obligations – have occurred
entity exist and pertain to entity
Completeness – anything Rights and obligations – Completeness – all has
that should have been entity holds and controls been included
recorded has been recorded rights to assets and Classification &
Accuracy - have been obligations are theirs understandability – is
recorded appropriately Completeness – have all appropriately presented and
Cut-off - have been been recorded described and disclosures
recorded in the correct Valuation and allocation – are clearly expressed
accounting period included at appropriate Accuracy and valuation –
Classification - have been amounts and valuation or disclosed fairly & at
recorded in the correct allocation adjustments are appropriate amounts.
accounts recorded
Assertions for Statement of Financial Position transactions and balances :
Assertion Audit objective - to obtain satisfaction that :
Completeness individual transactions and balances in respect of specific kind of asset or liability are fully
accounted for in the accounting records and financials
Valuation & the balance for the specific asset or liability has been accounted for at the appropriate carrying
allocation value and that the transactions have been correctly allocated to the proper period and recorded
at the proper amount
Existence at a given date the asset or liability did exist and the transactions did take place during the
period in question
Rights & at a given date the asset or liability pertains to the entity and that the transactions did take
obligations place during the period in question
Presentation & the asset or liability was disclosed, classified and described in accordance with the applicable
disclosure legal requirements and generally accepted accounting practice
Assertions for Statement of Comprehensive Income transactions and balances :
Assertion Audit objective - to obtain satisfaction that the specific revenue or expenditure :
Completeness transactions and balances are fully accounted for in the accounting records and financial
statements
Occurrence transactions actually took place during the period in question (occurrence)
transactions pertain to the entity (validity)
Cut-off / accuracy / transactions are recorded in the proper period, are correctly allocated and are recorded at the
classification proper amount
Presentation & balances are disclosed, classified and described in accordance with the applicable legal
disclosure requirements and generally accepted accounting practice (ISA’s & 4th schedule)
, 2
Procedures used by auditor to obtain audit evidence :
Analysis of objectives Procedures of auditor
Completeness :
All transactions were recorded at the time when they - check date on the supporting documentation
took place
All transactions have been reported in the accounting - check sequential numbering of transactions
records
Occurrence :
- investigate existence of valid documents
Transactions reordered in records did actually take - compare entries in accounting records with supporting
place documents
- check that transactions have been authorised
Transactions recorded in the accounting records - check supporting document to ensure that entity was party in
pertain to the entity the transaction
Existence :
- perform physical inspection of assets and compare it with the
Assets and liabilities did actually exist on given date accounting record
- examine supporting documentation
- obtain supporting evidence from 3rd parties
Accuracy / cut-off / classification :
All transactions have been recorded at the proper - compare the amount from supporting documents with the
amount amount in the accounting records
All transactions have been correctly allocated - compare the allocation with the particulars in the supporting
documents
All transactions have been recorded in the correct - compare the date of the transaction with the date on the
financial period supporting documentation
Valuation :
Assets and liabilities have been recorded at an - obtain external valuation or confirmation from 3rd parties
appropriate carrying value
Assess value by physical inspection - compare value by referring to supporting documentation
Assess the reasonable of the amounts claimed for
reduction / increase or write-off of assets
Rights and obligations :
- examine supporting documentation
Assets and liabilities pertain to the entity at a given
date - obtain evidence from 3rd parties in support of rights or
obligations
- obtain sufficient information to make sure that the state of
affairs was applicable at given date
Presentation and disclosure :
Items in financials have been correctly disclosed, - examine financials and obtain satisfaction that there has
classified and described been proper disclosure, classification and description in
terms of the Companies Act and generally accepted
accounting practice
