Question

Identify and explain the management assertions in the revenue business process.

Answer 1

Solution: Management assertions in the revenue business process:

The auditor gathers evidence related to the revenue business process to evaluate management's assertions about the accounts in the revenue processes.

These assertions are:-

•Existence or occurence: For cash and investments and investment's gain and losses transactions.

•Completeness: For cash and investments and investment's gain and losses transactions.

•Valuation and allocation: For investment's account ending balances.

•Rights& Obligations: to the assets of cash and investments.

•Accuracy: for transaction related to investment's account.

•Cut-off: for recording transactions in accordance with GAAP

•Classification: transactions related to investments are properly classified on the financial statements.