Exam (elaborations)
AUE2602 SUMMARY STUDY NOTES 2022
- Course
- AUE2602 STUDY NOTES 2022
- Institution
- University Of South Africa (Unisa)
AUE2602 SUMMARY STUDY NOTES 2022 AUE2602 SUMMARY STUDY NOTES 2022
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lOMoARcPSD|11450120Aue2602 Study
Summary Notes
Auditing Theory and Practice
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Assertions are categorized as follows:
• assertions about classes of transactions and events for period under audit e.g. sales, interest received
• assertions about account balances at year-end e.g., accounts receivable, property, plant and equipment
• assertions about presentation and disclosure e.g., notes that support Statement of Financial Position
account headings, contingent liabilities
Transactions and events: Account balances: Presentation & disclosure:
• Occurrence – have all • Existence – assets, • Occurrence and rights and
occurred and pertain to liabilities and equity obligations – have
the entity interest exist occurred and pertain to
• Completeness – anything • Rights and obligations – entity
that should have been entity holds and • Completeness – all
recorded has been controls rights to has been included
recorded assets and obligations • Classification &
• Accuracy - have are theirs understandability – is
been recorded • Completeness – have appropriately presented
appropriately all been recorded and described and
• Cut-off - have been • Valuation and allocation – disclosures are clearly
recorded in the included at appropriate expressed
correct accounting amounts and valuation • Accuracy and valuation –
period or allocation disclosed fairly &
• Classification - have adjustments are at appropriate
been recorded in the recorded amounts.
correct accounts
Assertions for Statement of Financial Position transactions and balances :
Assertion Audit objective - to obtain satisfaction that :
Completeness individual transactions and balances in respect of specific kind of asset or
liability are fully accounted for in the accounting records and financials
Valuation & the balance for the specific asset or liability has been accounted for at the
allocation appropriate carrying value and that the transactions have been correctly allocated
to the proper period and recorded at the proper amount
Existence at a given date the asset or liability did exist and the transactions did take place
during the period in question
Rights & at a given date the asset or liability pertains to the entity and that the
obligations transactions did take place during the period in question
Presentation & the asset or liability was disclosed, classified and described in accordance with the
disclosure applicable legal requirements and generally accepted accounting practice
Assertions for Statement of Comprehensive Income transactions and balances :
Assertion Audit objective - to obtain satisfaction that the specific revenue or expenditure :
Completeness transactions and balances are fully accounted for in the accounting records
and financial statements
Occurrence • transactions actually took place during the period in question (occurrence)
• transactions pertain to the entity (validity)
Cut-off / accuracy / transactions are recorded in the proper period, are correctly allocated and are
classification recorded at the proper amount
Presentation & balances are disclosed, classified and described in accordance with the applicable
disclosure legal requirements and generally accepted accounting practice (ISA’s & 4th
schedule)
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