Assertions Rapid Fire

Question 1

Procedures to test Completeness:

Answer 1

TRACING transactions from source documents to records

ANALYTICAL REVIEW procedures - consider how certain items might be omitted from the account balance (ie unrecorded liabilities or omissions of pledged assets)

OBSERVATION of processes and procedures

CUTOFF procedures if tested to confirm activity is captured in the audited FS

Question 2

Procedures to test Cutoff:

Answer 2

CUTOFF to analyze transactions before and after year-end for proper accounting period recognition

Question 3

Procedures to test Valuation, Allocation, and Accuracy:

Answer 3

INSPECTION of documentation supporting transactions

FOOTING and cross-footing schedules

INDEPENDENT RECALCULATION - especially recalculation of estimates made by the client

RECONCILIATION of supporting schedules to general ledger line items

Question 4

Procedures to test Existence and Occurrence:

Answer 4

CONFIRMATION of accounts with third parties

OBSERVATION / INSPECTION / EXAMINATION of assets, processes, and procedures

VOUCHING of transactions from records to source documentation

Question 5

Procedures to test Rights and Obligations:

Answer 5

INSPECTION of documentation supporting transactions, inspection of contracts

Question 6

Procedures to test Understandability of Presentation and Classification:

Answer 6

INSPECTION of documentation supporting transactions

REVIEW of all disclosures

INQUIRY of mgmt regarding disclosures for accounts and related accounts