Assertions

Assertions Claims that management makes about the correctness of its financial statements and, by implication, the transactions comprising the accounts balances that make up the financial statements. are claims that management makes about the correctness of its financial statements and, by implication, the transactions comprising the accounts balances that make up the financial statements.

COSO Committee of Sponsoring Organizations of the Treadway Commission and PCAOB Public Company Accounting Oversight Board define relevant assertions as management authorization, completeness, existence or occurrence, valuation and allocation, rights and obligations, presentation and disclosure and safeguarding.  Of course, not all assertions apply to all processes or controls.

 

The Assertions List-of-Values currently use the COSO and PCAOB assertion tools.   See descriptions of the assertions at the bottom of this page.

 

 

 

Assertion

Description

Management Authorization

An assertion that management has authorized receipts, expenditures, acquisitions, use and dispositions.

Existence or Occurrence

As assertion that an asset or liability exists at a point in time and/or that a recorded transaction or event actually took place during the period. Controls exist to ensure periodic accountability is assured and to ensure that fictitious or duplicate transactions are not included in the records.

Completeness

An assertion that there are not unrecorded assets, liabilities, transactions or events, or undisclosed items. Controls exist to ensure actual transactions are not omitted from the records, all transactions are reflected in the proper accounting period, transactions are recorded in the correct amounts, all charges and credits in the underlying records are accumulated correctly, and accumulated totals are correctly transferred to the general ledger.

Valuation & Allocation

An assertion that an asset or liability is recorded at an appropriate amount. An assertion that a transaction or event is recorded at the proper amount and revenue or expense is allocated to the proper period. Controls exist to ensure that transactions are recorded at correct monetary amounts.

Rights & Obligations

An assertion that an asset or liability pertains to the company at a point in time. Controls exist to ensure that the entity has legal title to recorded assets and rights to assets are only assigned with proper authorization, and only liabilities of the company are recorded.

Presentation and Disclosure

An assertion that an item is properly classified, described, and disclosed in the financial statements. This item may be covered by the submission process or by the 'Disclosure' process in the Reporting Cycle.

Safeguarding

An assertion that management adequately safeguards all assets.  Controls exist that ensure all assets are appropriately safeguarded.