Dear friends
What is meant by
The auditor should identify and assess the risks of material statement, whether due to fraud or error at assertion levels?
2 Replies
Yogesh
(Manager)
(50 Points)
Replied 21 August 2011
Audit assertion mean
For BS: Completeness, Right & Obligation, Existence, Valuaion, Presentation and Disclosure
For P&L: Completeness, Occurence, Measurement, Presentation and Disclosure
Each critical accounts in the financial statements are associated with above mentioned assertions and we assess the risk of material misstatement and fraud risk and accordingly we prepare audit program to mitigate risk.
For e.g
For Debtors: risk may be valuation of debtors i.e. recoverability
For Fixed Assets: Existence of FA
Fraus risk may be occurence of revenue, existence of debtors etc. You can refer SA 240 for fraud risk.
Hope it clarifies.
Regards
ankita
(Coaching)
(73 Points)
Replied 21 August 2011
It means if the financial statements are correct with regard to existence or occurrence of assets, liabilities or transactions, completeness of information in the financial statements, rights and obligations at a point in time, appropriate valuation or allocation, presentation, and disclosure
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