[vital11]

I’m just making sure I have this down. Does anyone spot anything wrong or something I am missing?

Is this correct for assertions (COVERU) when you’re given these assertions the auditor will:

Completeness – use analytical procedures, tracing, observation

CutOff- use cut off procedures (ie look at date before and after period end)

Valuation, Allocation, Accuracy – use footing, reconciliation, reperformance, observation

Existence – use confirmation, observation, examination, investigation, vouching

Rights and Obligations – inspection

Understanding & Classification – use inquiry of management, inspection, review

If the question is about managements assertions of Accounts or Balance, Transactions & events, Presentation & Disclosure you use the following:

Accounts or Balances the assertions are (CVER) completeness, valuation allocation accuracy, existence, rights and obligations

Transactions and Events the assertions are (COVE) completeness, cutoff, valuation allocation accuracy, existence

Presentation and disclose the assertions are (CVRU) completeness, valuation allocation accuracy, rights & obligations, understanding & classification

Also I’m studying the following ratios, does anyone have any other important ones that I am missing?

Working capital: CA-CL

Current Ration – CA/CL

Quick acid – (cash+ marketable securities +AR)/ CL

AR turn over – Net Credit Sales/avg AR

AR Days turnover- 365/AR turnover

Inventory Turn over – COGS/ net avg inventory

Inventory Days turnover – 365/inventory turnover

Working Capital turnover – Sales/ avg working capital

Total asset turnover- Net Sales/ Total Assets

Net Profit Margin – Net Income/Net Sales

Return on total assets – NI/Avg Total assets

Return on common equity – (NI – Preferred dividends)/ avg CS

Net operating margin percentage- Net operating Income/ Net Sales

Gross profit margin percentage- (Sales – Cogs)/Sales

Debt equity- Total liabilities/ equity (CS) outstanding

Debt ratio- Total liabilities/ total assets

[nolifecpa]

Transactions and Events the assertions are (COVE) completeness, cutoff, valuation allocation accuracy, existence

i have completeness, cutoff, accuracy, classification, occurance

not sure if this is diff due to the changes

AR turn over – Sales/ net avg AR

i have Net credit sales/avg AR

Return on common equity – (NI – Preferred dividends)/CS outstanding

i have (NI-PD)/avg CS

REG-65,71,74,73,70,74,79
BEC-60's,60's,69,71,76*,78
FAR-67,66,65,79
AUD-54,60's,65,83*,69,80
*expired

DONE

[vital11]

Okay thanks,

How would you find out what Net Credit Sales is? Would they have to give you the amount credit sales and you deduct that from total sales?

Also I'll edit my post so it has the correct formulas for the ratios.

[vital11]

Okay thanks,

How would you find out what Net Credit Sales is? Would they have to give you the amount credit sales and you deduct that from total sales?

Also I'll edit my post so it has the correct formulas for the ratios.

[Anonymous]

I have transactions and events as COVEU from my AUD-A

With the updated review materials I got for my retake this testing window, I improvised my own mnemonic because I find Valuation would not always be the same as Accuracy and Allocation same with Existence and Occurrence. I find these assertions really confusing.

Transactions and event >> COCOA* [Completeness, Cutoff, Classification, Occurrence & Accuracy]

Where did Existence go? I don't know. I just have to mechanically memorize it. Oftentimes, I get MCQs right just reminding myself of this mnemonic. But I'd still go back and forth with my CVER-COVEU-CVRU for relevant assertions: Account-Transactions-Disclosure.

*CRAVE for Account Balance [Completeness, Rights&Obligation, Allocation, Valuation, & Existence]

CURVA for Disclosure [Completeness, Understandability & Classification, Rights & Obligation, Valuation, & Accuracy]

[nolifecpa]

Net credit sales = credit sales – sales disc – sales return & allowances

if the question just gives you 1 sales number then just assume its net

REG-65,71,74,73,70,74,79
BEC-60's,60's,69,71,76*,78
FAR-67,66,65,79
AUD-54,60's,65,83*,69,80
*expired

DONE

[Author]

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