- 20 Marks
AA – L2 – Q55 – Audit Evidence
List and describe six financial statement assertions, excluding completeness, used in auditing financial statements. Describe substantive audit procedures for payroll balances and transactions in Blossom Textiles' financial statements.
Question
Auditors may use two categories of assertions to form a basis for risk assessments and the design and performance of further audit procedures. The two categories suggested by ISA 315 relate to (i) classes of transactions and events and related disclosures and (ii) account balances and related disclosures. One assertion applicable to both categories is completeness: that all transactions, events, assets, liabilities, equity interests and disclosures that should be included, are included in the financial statements.
Required:
(a) List and describe SIX financial statement assertions, other than completeness, used by auditors in the audit of financial statements. (6 marks)
(b) Describe the substantive audit procedures you will perform on:
(i) the payroll balances in the statement of financial position of Blossom Textiles. (7 marks)
(ii) the payroll transactions in the statement of comprehensive income of Blossom Textiles. (7 marks)
Find Related Questions by Tags, levels, etc.
- Tags: Audit Procedures, Financial Statement Assertions, Payroll Audit
- Level: Level 2
- Topic: Audit Evidence
