Imagine you are the auditor of an organization and you find that the Trial balance of the financial year does not tally (Dr and Cr are not equal) Explain the assertions you would apply. ( use all the assertions in the answer)

LO# 2 IC raw ll ucation The Role of Auditing Table 1-2 Summary of Management Assertions by Category : . . Assertions about classes of transactions and events for the period under audit: Occurrence - transactions and events that have been recorded have occurred and pertain to the entity. Completeness - all transactions and events that should have been recorded have been recorded. Authorization - all transactions and events have been properly authorized.* Accuracy - amounts and other data relating to recorded transactions and events have been recorded appropriately. Cutoff - transactions and events have been recorded in the correct accounting period. Classification - transactions and events have been recorded in the proper accounts. . . . . Assertions about account balances at the period end: Existence - assets, liabilities, and equity interests exist. Rights and obligations - the entity holds or controls the rights to assets, and liabilities are the obligations of the entity Complete ss - all assets, liabilities, and equity interests that should have been recorded have been recorded. 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. . . Assertions about presentation and disclosure: Occurrence and rights and obligations - disclosed events, transactions and other matters have occurred and pertain to the entity. Completeness - all disclosures that should be been included in the financial statements have been included. Classification and understandability - financial information is appropriately presented and described and disclosures are clearly expressed. Accuracy and valuation - financial and other information are disclosed fairly and at appropriate amounts. . *International and AICPA auditing standards consider Authorization to be a subset of the Occurre nce assertion and thus do not list it separately. We list Authorization as a separate assertion about classes of transactions and events for instructional clarity. 1-6