Management is responsible for the fair presentation of the financial statements prepared by them.

Assertions are representations by management, explicit or otherwise, that are embodied in the

financial statements, as used by the auditor to consider the different types of potential

misstatements that may occur.

Fair CPA, the independent auditor of Shine Limited (Shine), is preparing the audit test plan for

the audit of Shines financial statements for the year ending 31 December 2020. As part of the

test plan, Fair CPA is planning to carry out the following audit procedures on some of Shines

account balances as of the year end and for transactions entered into during the year:4 | P a g e

(i) Confirmation of bank balances.

(ii) Search for unrecorded accounts payable.

(iii) Check the market value of listed investments.

(iv) Check to ensure that every sales invoice is properly supported by a delivery note.

(v) Check to ensure that all goods delivered after the year-end are not reflected in the

current years sales account.

(vi) Attending inventory count to be performed by Shine on 31 December 2020.

(vii)Inspection of the sale and purchase agreement relating to a property recently purchased

by Shine.

(viii) Check to ensure that the depreciation charge for property, plant and equipment is

correctly calculated.

(ix) Check the net realizable value of Shines inventory as of 31 December 2020.

(x) Review the recoverability of an old-aged accounts receivable.

Required:

In respect of the above-mentioned proposed audit procedures, what management assertions are to

be tested by Fair CPA?