What are the financial statement assertions made by management accounting to ISA 500?

Answer 1

Under the International Standard on Auditing (ISA) 500, the financial statement assertions made by management accounting are as follows:

1. Existence or occurrence: Financial statement items exist at a given date, and transactions and events have occurred during the period.
2. Completeness: All transactions and events that should have been recorded have been recorded and are included in the financial statements.
3. Rights and obligations: The entity has legal rights to assets and revenue, and liabilities are obligations of the entity.
4. Valuation or allocation: Assets, liabilities, revenue, and expenses are valued or allocated appropriately and in accordance with the applicable financial reporting framework.
5. Presentation and disclosure: Financial statements are properly presented, described, and disclosed in accordance with the applicable financial reporting framework to achieve fair presentation.

These assertions provide reasonable assurance to auditors that the financial statements are free from material misstatement. By making these assertions, management takes responsibility for presenting accurate and complete financial information. Auditors then perform procedures to assess whether these assertions are valid and reliable, ensuring the reliability of the financial statements.