What does the accuracy assertion in classes of transactions address?
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Whether the amounts of the transactions in the income statements have been recorded appropriately.
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What does the accuracy assertion in classes of transactions address?
Whether the amounts of the transactions in the income statements have been recorded appropriately.
Why are users of financial statements more likely to trust an opinion from an independent auditor?
Because auditors are independent from management, leading to more accurate information and trustworthy opinions.
What are classes of transactions in the audit process?
Classes of transactions are transactions for the year recorded in the income statement accounts, also referred to as transactions in the revenue and expense accounts.
What is the role of the auditor in the review of financial statements?
The auditor reviews financial information prepared by management to determine whether it conforms to a particular standard (e.g., IFRS/MFRS). The auditor follows auditing standards (e.g., ISA) and is independent of the company. The auditor verifies the truth and fairness of the financial information so that outsiders, such as bankers, shareholders, or regulatory bodies, have accurate information to make decisions.
What are the two forms of auditor independence?
Independence in fact and independence in appearance.
What is the principal reason for management to misstate financial statements?
To keep the company’s share price from falling.
