Financial statement assertions

AA – Nov 2019 – L2 – Q3 – Audit and Assurance Evidence

Discusses the audit objectives, sources of evidence for inventory audit, and why stocks present high audit risk.

Question

The information in the financial statements of your client, Honesty Company Limited, represents claims by management in relation to its responsibility to prepare financial statements that give a true and fair view of the company’s state of affairs and results of operations for the year under review. These claims are referred to as financial statement assertions.

Required:
a) Outline the audit objectives for the audit of stock (inventories) in the financial statements. Your answer should relate to the financial statement assertions. (8 marks)

b) Discuss FOUR (4) sources from which evidence can be obtained to confirm the quantities and value of stocks. (8 marks)

c) Explain why stocks present high audit risk. (4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit evidence, Audit Objectives, Audit Risk, Financial statement assertions, Inventory
Level: Level 2

Topic: Audit and Assurance Evidence
Series: NOV 2019

AA – May 2020 – L2 – Q3a – Audit and Assurance Evidence

Explain the main assertions about account balances and give examples from the audit of trade receivables.

Question

Audit Evidence requires the auditor to obtain sufficient, appropriate evidence to be able to draw reasonable conclusions on which to base the audit opinion. That evidence should be relevant to the financial statement assertions.

Required:
i) Explain the main assertions about account balances and provide an example of each one by reference to the audit of trade receivables. (8 marks)

ii) Identify FIVE (5) of the seven main audit testing procedures (e.g., inspection) and give an example of how each might be used in the audit of plant and machinery. State the assertion being tested in each case. (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit evidence, Financial statement assertions, ISA 500, Trade receivables
Level: Level 2

Topic: Audit and Assurance Evidence
Series: MAY 2020

AA – May 2018 – L2 – Q4b – Audit and Assurance Evidence

Identifies key financial statement assertions for year-end account balances and describes substantive procedures related to inventory.

Question

b)
i) Identify and explain two financial statement assertions relevant to account balances at the year-end. (2 marks)
ii) For each identified assertion, describe a substantive procedure relevant to the audit of year-end inventory.

(4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Assertions, Financial statement assertions, Inventory, Substantive Procedures, Year-end balances
Level: Level 2

Topic: Audit and Assurance Evidence
Series: MAY 2018

AA – Nov 2019 – L2 – Q3 – Audit and Assurance Evidence

Discusses the audit objectives, sources of evidence for inventory audit, and why stocks present high audit risk.

Question

Required:
a) Outline the audit objectives for the audit of stock (inventories) in the financial statements. Your answer should relate to the financial statement assertions. (8 marks)

b) Discuss FOUR (4) sources from which evidence can be obtained to confirm the quantities and value of stocks. (8 marks)

c) Explain why stocks present high audit risk. (4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit evidence, Audit Objectives, Audit Risk, Financial statement assertions, Inventory
Level: Level 2

Topic: Audit and Assurance Evidence
Series: NOV 2019

AA – May 2020 – L2 – Q3a – Audit and Assurance Evidence

Explain the main assertions about account balances and give examples from the audit of trade receivables.

Question

Required:
i) Explain the main assertions about account balances and provide an example of each one by reference to the audit of trade receivables. (8 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit evidence, Financial statement assertions, ISA 500, Trade receivables
Level: Level 2

Topic: Audit and Assurance Evidence
Series: MAY 2020

AA – May 2018 – L2 – Q4b – Audit and Assurance Evidence

Identifies key financial statement assertions for year-end account balances and describes substantive procedures related to inventory.

Question

(4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Assertions, Financial statement assertions, Inventory, Substantive Procedures, Year-end balances
Level: Level 2

Topic: Audit and Assurance Evidence
Series: MAY 2018

Question Tag: Financial statement assertions

Filter by Professional Bodies

Filter by Subject

Filter by Series

Filter by Topics

Filter by Levels

AA – Nov 2019 – L2 – Q3 – Audit and Assurance Evidence

Discusses the audit objectives, sources of evidence for inventory audit, and why stocks present high audit risk.

AA – May 2020 – L2 – Q3a – Audit and Assurance Evidence

Explain the main assertions about account balances and give examples from the audit of trade receivables.

AA – May 2018 – L2 – Q4b – Audit and Assurance Evidence

Identifies key financial statement assertions for year-end account balances and describes substantive procedures related to inventory.

AA – Nov 2019 – L2 – Q3 – Audit and Assurance Evidence

Discusses the audit objectives, sources of evidence for inventory audit, and why stocks present high audit risk.

AA – May 2020 – L2 – Q3a – Audit and Assurance Evidence

Explain the main assertions about account balances and give examples from the audit of trade receivables.

AA – May 2018 – L2 – Q4b – Audit and Assurance Evidence

Identifies key financial statement assertions for year-end account balances and describes substantive procedures related to inventory.

Our offerings

Contact Info

Customer

Get In Touch

Question Tag: Financial statement assertions

Filter by Professional Bodies

Filter by Subject

Filter by Series

Filter by Topics

Filter by Levels

AA – Nov 2019 – L2 – Q3 – Audit and Assurance Evidence

Discusses the audit objectives, sources of evidence for inventory audit, and why stocks present high audit risk.

You're reporting an error for "AA – Nov 2019 – L2 – Q3 – Audit and Assurance Evidence"

AA – May 2020 – L2 – Q3a – Audit and Assurance Evidence

Explain the main assertions about account balances and give examples from the audit of trade receivables.

You're reporting an error for "AA – May 2020 – L2 – Q3a – Audit and Assurance Evidence"

AA – May 2018 – L2 – Q4b – Audit and Assurance Evidence

Identifies key financial statement assertions for year-end account balances and describes substantive procedures related to inventory.

You're reporting an error for "AA – May 2018 – L2 – Q4b – Audit and Assurance Evidence"

AA – Nov 2019 – L2 – Q3 – Audit and Assurance Evidence

Discusses the audit objectives, sources of evidence for inventory audit, and why stocks present high audit risk.

You're reporting an error for "AA – Nov 2019 – L2 – Q3 – Audit and Assurance Evidence"

AA – May 2020 – L2 – Q3a – Audit and Assurance Evidence

Explain the main assertions about account balances and give examples from the audit of trade receivables.

You're reporting an error for "AA – May 2020 – L2 – Q3a – Audit and Assurance Evidence"

AA – May 2018 – L2 – Q4b – Audit and Assurance Evidence

Identifies key financial statement assertions for year-end account balances and describes substantive procedures related to inventory.

You're reporting an error for "AA – May 2018 – L2 – Q4b – Audit and Assurance Evidence"

Our offerings

Contact Info

Customer

Get In Touch

admin