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Flashcards in Assertions Deck (33):
1

Principal objectives in auditing cash
All cash on the balance sheet is held by the entity or by others (for example, a bank) for the entity.

E

2

Principal objectives in auditing cash
All cash owned by the entity at year end is included in the balance sheet.

C

3

Principal objectives in auditing cash
Cash is stated at its realizable value.

V&A

4

Principal objectives in auditing cash
The entity owns, or has legal rights to, all the cash on the balance sheet at year end. All cash is free from restrictions on use, liens, or other security interests, or, if it is not free, that such restrictions, liens, or other security interests are identified.

Rights and obligations (R&O)

5

Principal objectives in auditing cash
Cash is properly classified, described, and disclosed in the financial statements, including the notes, and disclosures of any of the above-mentioned restrictions on use, etc., are made as required by application of an appropriate accounting framework (for example, International Financial Reporting Standards or Accounting Standards for Private Enterprises).

Classification (Cl), classification and understandability (C&U)

6

Principal objectives in auditing trade receivables
All receivables on the balance sheet are real claims of the entity.

E

7

Principal objectives in auditing trade receivables
All real claims of the entity for amounts receivable are included on the balance sheet.

C

8

Principal objectives in auditing trade receivables
Receivables are carried at their net realizable (collectable) value (that is, the gross receivables are properly stated with appropriate allowances provided for uncollectable accounts, discounts, returns, warranties, and similar items).

V

9

Principal objectives in auditing trade receivables
The entity owns, or has legal right to, all the receivables on the balance sheet at year end. All receivables are free from liens, pledges, or other security interests or, if not, such liens, pledges, or other security interests are identified.

A

10

Principal objectives in auditing trade receivables
Receivables are properly classified, described, and disclosed in the financial statements, including the notes, in conformity with prescribed accounting principles (IFRS and ASPE).

Classification (Cl), classification and understandability (C&U)

11

Principal objectives in auditing inventory
All inventory on the inventory listing is included in the financial statements.

E

12

Principal objectives in auditing inventory
All inventory owned by the entity at year end is included on the balance sheet.

C

13

Principal objectives in auditing inventory
Inventory is carried at the lower of cost or net realizable value. Ensure that the cost and net realizable value determinations are appropriate, including adequate provisions for excess, slow-moving, obsolete, and damaged goods, and for losses on purchase and sale commitments.

V&A

14

Principal objectives in auditing inventory
The entity owns, or has legal right to, all of the inventory on the balance sheet. All inventory is free of liens, pledges, and other security interests or, if not, such liens, pledges, or other security interests are identified.

Rights and obligations (R&O)

15

Principal objectives in auditing inventory
Inventory is properly classified, described, and disclosed in the financial statements, including the notes, in conformity with prescribed accounting principles (IFRS).

Classification (Cl), classification and understandability (C&U)

16

Principal objectives in auditing property, plant, and equipment
All PPE on the balance sheet (including assets leased under finance leases) are held by the entity or by others for the entity.

E

17

Principal objectives in auditing property, plant, and equipment
All PPE owned or leased under finance (capital) leases by the entity at year end are included on the balance sheet.

C

18

Principal objectives in auditing property, plant, and equipment
PPE are carried at the appropriate amount (taking into account accumulated depreciation, amortization, or impairment). The cost of the plant and equipment is allocated to the appropriate accounting periods in a systematic and rational manner. The written-down value of the PPE is expected to be recoverable through future use. PPE assets held for disposal are carried at the appropriate value.

V&A

19

Principal objectives in auditing property, plant, and equipment
The entity owns, or has legal right to, all the PPE on the balance sheet at year end. All PPE assets are free from liens, pledges, security interests, and restrictions or, if not, such liens, pledges, security interests, and restrictions are identified and disclosed (if necessary).

Rights and obligations (R&O)

20

Principal objectives in auditing property, plant, and equipment
PPE and related accounts are properly classified, described, and disclosed in the financial statements, including the notes.

Classification (Cl), classification and understandability (C&U)

21

Principal objectives in auditing payables
All accounts payable on the balance sheet are real debts that are payable to suppliers or other creditors of the entity for goods received or services performed.

E

22

Principal objectives in auditing payables
All accounts payable owed by the entity at year end are included on the balance sheet.

C

23

Principal objectives in auditing payables
Accounts payable are stated at the amounts owed at year end.

V&A

24

Principal objectives in auditing payables
The accounts payable on the balance sheet represent obligations of the entity at year end. The accounts payable are not secured by liens on assets, security interests, or other collateral unless otherwise indicated.

Rights and obligations (R&O)

25

Principal objectives in auditing payables
Accounts payable are properly classified, described, and disclosed in the financial statements, including the notes.

Classification (Cl), classification and understandability (C&U)

26

Principal objectives in auditing revenue

ll sales included in the income statement represent the exchange of goods or services with customers for cash or other consideration during the period.

All other revenues included in the income statement for the period have accrued to the entity at year end.

Revenues applicable for future periods have been deferred.

Occurrence (O)

27

Principal objectives in auditing revenue
All sales and other revenues that accrued to the entity during the period are included in the income statement.

C

28

Principal objectives in auditing revenue
Sales and other revenues are stated at the appropriate amounts.

Accuracy and cut-off (A&CO)

29

Principal objectives in auditing revenue
Sales and other revenues are properly classified, described, and disclosed in the financial statements, including the notes.

Classification (Cl), classification and understandability (C&U)

30

Principal objectives in auditing costs and expenses
All costs and expenses in the income statement are properly supported as charges against the entity in the period. Costs and expenses applicable to future periods are carried forward as inventory, prepaid expenses, deferred charges, or property, plant, and equipment.

O

31

Principal objectives in auditing costs and expenses
All costs related to the current period's revenues, and all expenses of the current period, are included in the income statement.

C

32

Principal objectives in auditing costs and expenses
Costs and expenses are stated in the income statement at the appropriate amounts.

Accuracy, cut-off (A, CO)

33

Principal objectives in auditing costs and expenses
Costs and expenses are properly classified, described, and disclosed in the financial statements, including the notes.

Classification, classification and understandability (Cl, C&U)