Question

Assertions about classes of transactions and events typically include _______.

1) occurrence, cutoff, and completeness
2) existence, rights, and obligations
3) existence, rights, and cutoff
4) completeness, accuracy, and valuation

Answer 1

The correct option is 4) completeness, accuracy, and valuation.

Step-by-step explanation:

When making assertions about classes of transactions and events, auditors typically focus on three main areas:

1. Completeness: ensuring that all transactions and events that should be recorded are included in the financial statements.
2. Accuracy: ensuring that the recorded transactions and events are stated at the appropriate amounts.
3. Valuation: ensuring that assets, liabilities, revenues, and expenses are appropriately measured.

These three areas help auditors evaluate the overall reliability and integrity of the financial statements.