Page 85 - CA Final PARAM Digital Book.

➢ Three types of Assertions: - Three types of data is given in financial statements, Account
Balances / Transactions / Notes to Accounts Hence three types of Assertions

Assertions at different levels are discussed below:

Assertions about Account Balances: - Existence / Completeness / Valuation & Allocation
/ Rights & Obligation
Assertions about account balances at the period end:
• Existence—assets, liabilities, and equity interests exist.
• Completeness—all assets, liabilities and equity interests that should have been recorded
have been recorded.
• Valuation and allocation—assets, liabilities, and equity interests are included in the
financial statements at appropriate amounts and any resulting valuation or allocation
adjustments are appropriately recorded.
• Rights and obligations—the entity holds or controls the rights to assets, and liabilities are
the obligations of the entity.

Assertions about Transactions & Events: - Occurrence / Completeness / Accuracy /
Classification / Cut-Off
Assertions about classes of transactions and events for the period under audit:
• Occurrence—transactions and events that have been recorded have occurred and pertain
to the entity.
• Completeness—all transactions and events that should have been recorded have been
recorded.
• Accuracy—amounts and other data relating to recorded transactions and events have been
recorded appropriately.
• Classification—transactions and events have been recorded in the proper accounts.
• Cut-off—transactions and events have been recorded in the correct accounting period.

Assertions about Presentation & Disclosure: - Occurrence and Rights & Obligation /
Completeness / Accuracy and Valuation / Classification & Understandability / Cut-Off
Assertions about presentation and disclosure:
• Occurrence and rights and obligations—disclosed events, transactions, and other matters
have occurred and pertain to the entity.
• Completeness—all disclosures that should have been included in the financial statements
have been included.
• Accuracy and valuation—financial and other information are disclosed fairly and at
appropriate amounts.
• Classification and understandability—financial information is appropriately presented and
described, and disclosures are clearly expressed.

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