Directions: Use the following assertions to complete the Module Four Assertions Assignment Template. 1. Existence - The existence assertion verifies that assets, liabilities, and equity balances exist as stated in the financial statement. For example, if a balance sheet indicates inventory on hand for $10,000, it is the job of the auditor to verify its existence. - The same process is used when verifying accounts receivable balances. The auditor is tasked with authenticating the accounts receivable balance as reported through a variety of means, including choosing a particular accounts receivable customer and examining all related activity for that customer. 2. Occurrence - The occurrence assertion is used to determine whether the transactions recorded on financial statements have taken place. Example: Authenticating accounts receivable balances by determining whether a sale took place on the day specified. 3. Accuracy - Accuracy looks at specific transactions and then checks the accuracy of the recorded entry to determine whether the amounts are recorded correctly. In many cases, an auditor will look at individual customer accounts, including payments, to verify that the amount recorded as paid is the same as received from the customer. 4. Completeness - Completeness helps auditors verify that all transactions for the period being examined have been properly entered in the correct period. - For example, an auditor may want to examine payroll records to make sure that all salaries and wages expenses have been recorded in the proper period. This may include an examination of payroll records, a payroll journal, an active employee list, and any payroll accruals that were made and reversed in the period being examined. - Inventory can also play a large role in the completeness assertion, with auditors looking at inventory transactions that took place during a specific period by examining inventory levels and corresponding sales numbers to determine that inventory was recorded properly. 5. Valuation - The valuation assertion is used to determine that the financial statements presented have all been recorded at the proper valuation. - An auditor can examine the accounts receivable aging report to determine if bad debt allowances are accurate. - Inventory is another area that auditors may review to determine whether inventory is properly valued and recorded using the appropriate valuation methods. 6. Cut-off - The cut-off assertion is used to determine whether the transactions recorded have been recorded in the appropriate accounting period. Payroll and inventory balances are often checked for cut-off accuracy to determine that the activity that took place was recorded in the appropriate period. This is particularly important for those accruing payroll or reporting inventory levels. Directions: Complete this template by replacing the bracketed text with the relevant information. 1. Complete the Assertions to be Tested column in the table below using the Module Four Audit Program Assertions List. There are six different assertions provided in the list. Find two assertions that can be used for each of the process types: cash, accounts payable, and revenue. You will have six unique assertions to work with. NOTE: You may not use an assertion more than once. 2. Complete the Test for Assertions column in the table below. 3. Complete the Key Internal Control column in the table below