Define the management assertions of: existence or occurrence, completeness, rights and obligations, valuation or allocation, presentation and disclosure.
What will be an ideal response?
The existence or occurrence assertion affirms that all assets and equities contained in the balance sheet exist and that all transactions in the income statement actually occurred.
The completeness assertion declares that no material assets, equities, or transactions have been omitted from the financial statements.
The rights and obligations assertion maintains that assets appearing on the balance sheet are owned by the entity and that the liabilities reported are obligations.
The valuation or allocation assertion states that assets and equities are valued in accordance with generally accepted accounting principles and that allocated amounts such as depreciation expense are calculated on a systematic and rational basis.
The presentation and disclosure assertion alleges that financial statement items are correctly classified (e.g.; long term liabilities will not mature within one year) and that footnote disclosures are adequate to avoid misleading the users of financial statements.
PTS: 1
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