Document ID: chunk:federal_register_of_legislation:F2016C00028:reg:26:p36
Version: federal_register_of_legislation:F2016C00028
Segment Type: reg
Provision Reference: reg 26 (pt 36/47)
Character Range: 111511–115063

reporting framework, and other statutory reporting requirements, management or where appropriate those charged with governance implicitly or explicitly makes assertions regarding the recognition, measurement and presentation of classes of transactions and events, account balances and disclosures.

Assertions about classes of transactions, account balances, and related disclosures

A128.      Assertions used by the auditor in considering the different types of potential misstatements that may occur fall into the following categories:

(a)                Assertions about classes of transactions and events, and related disclosures, for the period under audit:

(i)                 Occurrence—transactions and events that have been recorded or disclosed, have occurred and such transactions and events pertain to the entity.

(ii)               Completeness—all transactions and events that should have been recorded have been recorded, and all related disclosures that should have been included in the financial report have been included.

(iii)             Accuracy—amounts and other data relating to recorded transactions and events have been recorded appropriately, and related disclosures have been appropriately measured and described.

(iv)             Cut‑off—transactions and events have been recorded in the correct accounting period.

(v)                Classification—transactions and events have been recorded in the proper accounts.

(vi)             Presentation—transactions and events are appropriately aggregated or disaggregated and clearly described, and related disclosures are relevant and understandable in the context of the requirements of the applicable financial reporting framework.

(b)                Assertions about account balances, and related disclosures, at the period end:

(i)                 Existence—assets, liabilities, and equity interests exist.

(ii)               Rights and obligations—the entity holds or controls the rights to assets, and liabilities are the obligations of the entity.

(iii)             Completeness—all assets, liabilities and equity interests that should have been recorded have been recorded, and all related disclosures that should have been included in the financial report have been included.

(iv)             Accuracy, valuation and allocation—assets, liabilities, and equity interests have been included in the financial report at appropriate amounts and any resulting valuation or allocation adjustments have been appropriately recorded, and related disclosures have been appropriately measured and described.

(v)                Classification—assets, liabilities and equity interests have been recorded in the proper accounts.

(vi)             Presentation— assets, liabilities and equity interests are appropriately aggregated or disaggregated and clearly described, and related disclosures are relevant and understandable in the context of the requirements of the applicable financial reporting framework.

Assertions about other disclosures

A129.      The assertions described in paragraph A128(a)–(b) above, adapted as appropriate, may also be used by the auditor in considering the different types of potential misstatements that may occur in disclosures not directly related to recorded classes of transactions, events, or account balances.  As an example of such a disclosure, the entity may be required to describe its exposure to risks arising from financial instruments, including how the risks arise; the objectives, policies and processes for managing the