Скачать с ютуб Audit Assertions Management Assertions | Auditing Course | CPA Exam в хорошем качестве

Audit Assertions Management Assertions | Auditing Course | CPA Exam

In this video, we explain management assertions Start your free trial: https://farhatlectures.com/ Management Assertions: An Overview Management assertions are claims made by management about the financial statements and the underlying transactions, balances, and disclosures. These assertions form the foundation for an auditor’s work, as they guide the assessment of whether the financial statements are presented fairly and comply with applicable accounting standards. Categories of Management Assertions Management assertions are typically grouped into the following categories: Assertions About Transactions and Events These relate to the occurrence, measurement, and reporting of financial transactions within a specific period. Occurrence: Transactions recorded in the financial statements actually happened. Completeness: All transactions that should be recorded have been recorded. Accuracy: Transactions are recorded at the correct amounts. Cutoff: Transactions are recorded in the correct accounting period. Classification: Transactions are recorded in the proper accounts. Assertions About Account Balances These address the completeness and valuation of the accounts as of a specific date. Existence: Assets, liabilities, and equity balances exist at the reporting date. Rights and Obligations: The entity holds or controls the rights to assets and has obligations for liabilities. Completeness: All account balances that should be included are included. Valuation and Allocation: Account balances are recorded at the proper values and adjustments, if necessary, are appropriately made. Assertions About Presentation and Disclosure These focus on how financial information is presented and disclosed in the financial statements. Occurrence and Rights and Obligations: Disclosed events and transactions have occurred and pertain to the entity. Completeness: All necessary disclosures are included in the financial statements. Classification and Understandability: Financial information is appropriately presented, clearly expressed, and easy to understand. Accuracy and Valuation: Financial and other information are disclosed fairly and at appropriate amounts. Importance of Management Assertions Foundation for Auditing: Auditors use these assertions to design and perform procedures that provide sufficient evidence to support their opinion on the financial statements. Risk Assessment: Helps identify areas where misstatements are more likely, enabling auditors to focus efforts on high-risk areas. Enhancing Accountability: Provides a framework for management to ensure the reliability of financial reporting and compliance with standards. Assisting Stakeholders: Stakeholders rely on the audited financial statements to make informed decisions, and assertions ensure these statements are credible. Common Challenges with Management Assertions Subjectivity: Certain assertions, such as valuation or classification, may involve significant judgment, leading to potential errors or bias. Complex Transactions: Assertions about transactions with multiple elements or those that involve sophisticated financial instruments can be difficult to evaluate. Incomplete Documentation: Inadequate records can hinder the ability to verify management’s claims. Fraud Risks: Intentional misstatements or omissions can undermine the reliability of assertions. Conclusion Management assertions are central to the preparation and auditing of financial statements. They establish the criteria for evaluating whether financial information is accurate, complete, and fairly presented. By addressing these assertions, auditors and stakeholders can better understand and trust the integrity of the financial reporting process. #cpaexam #cpatips #auditing