[Haldius]

So I’ve been cruising through all of the Becker Audit material with relative ease (unlike FAR, thank goodness…) until I hit Becker A4 when it talks about the many cycles and their respective assertions. Now, I’m not an audit person (which may be partially to blame), but the completeness vs. existence assertions are throwing me for a loop. I could narrow down almost all of the PassMaster questions to just 2 answers every time but still got TONS wrong because I don’t quite understand these assertions just yet… I keep getting them mixed up. I suppose if I had done some proper auditing in my day that this wouldn’t be such a problem. As is, however, I’m struggling.

Anyone in a similar predicament? Anyone have any suggestions for me to get these assertions (or all of the assertions) straightened out so that I can pass my test in 4 weeks? I have a feeling that these will be a big part of the real test just by looking at the recently released questions for the last few years so any help would be greatly appreciated.
 

 

REG (5/31/12) - 90
FAR (7/12/12) - 85
AUD (8/23/12) - 91
BEC (10/13/12) - 85

Using Becker 2012 Materials, Self-Study

[Anonymous]

well the completeness assertion means including all transactions of an account in the balance

existence means that a certain legitimate asset or liability exists and is properly accounted for at a certain time

so when you're testing completeness, typically it relates to liabilities because a client may be inclined to understate their liabilities to make their financial position look better than it actually is. in order to test completeness, an auditor will select certain transaction throughout the year to verify, as well as items after year-end to ensure it has been included in the proper period.

existence typically relates to assets and a client may have the inclination to overstate assets. to test existence an auditor would either use confirmations or physical observance procedures to verify that these assets actually exist

this part of the exam is definitely tougher but its really the core of understanding what auditing is, read it a few times through and it should start coming together. also remember the “T”racing and “V”ouching rules that Becker talks about, good luck!

[Anonymous]

easy way to remember it,

Completeness, If you trace forward through the documents are all your records complete from the beginning to the end

Existence (or occurrence) , if you trace back (vouch) from the ledgers did the transaction actually exist. If you go backwards will you find the original transaction, did it exist (or was it just recorded in the books)

[Anonymous]

Haha, wow. I literally came on here to basically post the exact same thing as you. I'm an auditor at a CPA firm. Went through A1-A3 thinking this would be easy, but got stuck on assertions/transaction cycles in A4. Really appreciate the info, all.

[Haldius]

Ahh… That does help make more sense of it. Thanks so much for clearing that up for me!

REG (5/31/12) - 90
FAR (7/12/12) - 85
AUD (8/23/12) - 91
BEC (10/13/12) - 85

Using Becker 2012 Materials, Self-Study

[Author]

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