Categories of Management’s Financial Statement Assertions
Financial statement assertions are management’s clarification about the appreciation, measurement, presentation, and confession of information in the financial statements. Financial statement assertions are classified into the following five:
Existence: The assertion of existence is made to check whether the specified assets and liabilities are present at the given date. It is also required to check that the transactions that are recorded took place at the specified date.
Completeness: Checking completeness of a financial statement is to analyze whether all the transactions that are already given in the financial statement are rightfully included.
Valuation: Valuation basically checks whether the different components of the financial statement have been included in the right proportion.
Rights and obligations: This is to check whether the assets that are included in the financial statement are the rights and the liabilities are the obligations of the company.
Presentation and Disclosure: This assertion is to ensure whether the items in the financial statements are classified in the right way