Assertion in Accounting

In accounting, assertion means declaration of management that financial statements have been prepared on the basis of business transactions and are showing the revenue and financial position. This assertion may be directly to company's auditor or only providing the unaudited financial statements are also indirect assertion that all financial reports are prepared on the basis of evidence. But, auditor will not deem it as the final truth. He will audit the truth of all direct and indirect assertions by following way:

1. Audit of Transactions

Auditor will audit whether all transactions are recorded. Whether all transactions are recorded correctly. Whether all transactions are relating to correct accounting period. Whether transactions are relating to company or not.

2. Audit of Accounts balances

Accounting assertion claims that company have right on all its assets but auditor will also check whether all these assets are physically exist or not. Whether all the account balance of assets are recorded correctly or not. Whether valuation is correctly recorded or not. Auditor can also verify account balances for knowing any accounting errors in these.

3. Audit of Presentation and disclosure

Auditor will also audit the balance sheet, income statement and cash flow statement. He will check whether
 financial statements are appropriately presented and described, and information in disclosures are clearly expressed.Whether financial and other information is disclosed fairly and at appropriate amounts.