Audit assertions are the statements made by the management of an entity about the financial statements, and are the basis for the auditor’s audit procedures and conclusions. The International Standards on Auditing (ISAs) specify certain audit assertions that the auditor should consider when planning and performing the audit, in order to obtain sufficient appropriate audit evidence.
The ISAs specify three types of audit assertions: presentation and disclosure assertions, transaction and event assertions, and assertion about account balances.
Presentation and disclosure assertions relate to the overall presentation and disclosure of the financial statements, and include assertions such as the completeness of the financial statements, the classification of transactions and events, and the accuracy and completeness of the disclosures.
Transaction and event assertions relate to the recognition, measurement, and presentation of transactions and events, and include assertions such as the accuracy and completeness of the transactions, the existence and occurrence of the transactions, and the rights and obligations of the entity arising from the transactions.
Assertions about account balances relate to the accuracy and completeness of the account balances in the financial statements, and include assertions such as the accuracy and completeness of the account balances, the valuation and allocation of assets and liabilities, and the presentation and disclosure of the account balances.
The auditor should consider the relevant audit assertions when planning and performing the audit, in order to obtain sufficient appropriate audit evidence to support the audit opinion. The audit assertions should be discussed with the management of the entity, and any significant assumptions and estimates used by the management should be assessed by the auditor.
