(a) Assertions about classes of transactions and events for the period under audit;
(i) Occurrence – transactions and events that have been recorded have occurred and pertain to the entity;
(ii) Completeness – all transactions and events that should have been recorded have been recorded;
(iii) Accuracy – amounts and other data relating to recorded transactions and events have been recorded appropriately.
(iv) Cutoff – transactions and events have been recorded in the proper period.
(v) Classification – transactions and events have been recorded in the proper accounts.
(b) Assertions about account balances 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;
(iv) Valuation and allocation – assets, liabilities, and equity interests are included in the financial statements at appropriate amounts and any resulting valuation or allocation adjustments are appropriately recorded.
(c) Assertions about Presentation and Disclosure:
(i) Occurrence and rights and obligations – disclosed events, transactions and other matters have occurred and pertain to the entity.
(ii) Completeness – all disclosures that should have been included in the financial statements have been included;
(iii) Classification and understandability – financial information is appropriately presented and described, and disclosures are clearly expressed;
(iv) Accuracy and valuation – financial and other information are disclosed fairly and at appropriate amounts.
This concept takes the view that draft accounts presented by the client to the auditor are making a number of promises, or assertions. The role of substantive testing is to verify these assertions. The assertions made by the financial statements and the related objectives of the substantive testing objectives set out above can be shown as follows:
| ASSERTION Assets shown include all rights under the control of the enterprise | TESTING OBJECTIVE Completeness |
| Transactions arising during the period are reflected in the period's financial statements The amounts at which assets and liabilities are stated is correct Assets and liabilities included on the balance sheet actually exist | Occurrence |
| Assets and liabilities are shown in the financial statements such that the user would have a clear understanding of the client's financial situation | Presentation and disclosure |
