- 1 Marks
AA – L2 – SA – Q4.7 – Financial Statement Assertions
Question
Identify which financial statement assertion is addressed for each of the below substantive procedures performed on a non-current asset schedule (which agrees to the financial statements).
- Confirming whether the costs on the schedule are correct
- Tracing items from the non-current asset register to the schedule
A Existence
B Accuracy and valuation
C Completeness
D Accuracy
E Existence
F Completeness
Answer
B, E
Explanation:
- Confirming whether the costs on the schedule are correct tests the accuracy and valuation assertion, as it verifies that the recorded amounts are correct (B).
- Tracing items from the non-current asset register to the schedule tests the existence assertion, ensuring that assets recorded on the schedule actually exist in the register (E). The combination of B and E matches the procedures to the correct assertions.
- Tags: Assertions, ICAG, Non-current Assets, Substantive Procedures
- Level: Level 2
- Topic: Audit and Assurance Evidence
- Uploader: Salamat Hamid