Essay About Management Assertions And Management Assertions Of An Audit

Describing Management Assertions of an Audit
Jody DetervilleACCT344-1503B-01Management Control and AuditingWillis JordanPhase 1 Discussion Board 2Describing Management Assertions of an Audit        By describing and understanding the assertions that are used by management in an audit helps internal and external auditors to know and understand what the management is looking for in the results of the audit. The necessary assertions that must be discussed, described or understood by management in relation to an audit are: existence, completeness, accuracy or valuation, rights and obligations and presentation and disclosure. By discussing each of these elements allows for the proper understanding of what assertions management is looking for in an audit.Understanding the Assertion of Existence        When management begins the decision to declare the assertions necessary for understanding the audit, the first assertion is existence. Existence is associated with account balances at the end of a period. Existence is associated with the following accounts: cash, accounts receivable, intangible assets and current assets (Freedman, J., 2015). Establishing and ensuring the existence of assets by the management during audit procedures allows for the proper understanding that all assets are properly accounted for and included in the audit.The Assertion of Completeness        The assertion of completeness when looking at the auditing procedure occurs in each of the various areas in which an organization can be audited under. The areas in which an organization can be audited in are: classes of transactions and events for the period under audit, account balances at the end of a period and under presentation and disclosure of the audit (Jordan, W., 2015). Since completeness is included in all aspects of the auditing process and is included in all areas of concern for the audit, it is essential to understand what completeness in each segment of the audit involves. By understanding how completeness relates each of the auditing areas helps to understand the importance of completeness for management. Completeness under the classes of transactions and events for the period under audit segment is associated with the assertion that all business events to which the company was subjected were recorded (Bragg, S., May 27, 2014). The second classification of completeness involves the account balances at the end of a period that is being audited addresses if all assets, liabilities and equity interests that should have been included in the ending balances on the financial statements have actually been included (“Completeness”, N.D.). The final aspect of completeness that must be addressed is associated with the presentation and disclosure of the audit. Completeness within presentation and disclosure addresses all transactions, balances, events and other matters that should have been included in the financial statements (Accounting-Simplified.com, 2010 – 2013).