The annual financial statements of a company can be viewed as a collection of assertions made by the directors. These assertions can be categorized as:
assertions about classes of transactions and events and related disclosures for the period under audit, for example sales, purchases, interest received; and
assertions about account balances and related disclosures at yearend, for example accounts receivable, property plant and equipment, accounts payable.
The auditor intends to obtain sufficient appropriate evidence pertaining to the assertions to be in a position to express an opinion on the fair resentation of the financial statements.
YOU ARE REQUIRED TO:
a Explain the term financial statement assertion.
b Identify the assertions pertaining to each of the above two categories and provide a brief explanation for each.
c Explain the term sufficient appropriate evidence.
d Explain the term the auditor's right of access.
e Explain the link between the assertions and the auditor's right of access.
