[jamel44]

I been having problems understanding this topic. How the assertions related to the questions that are being asked. does any one have any tips that you can use to answer questions about the these various assertions.

I get confused for example:

In confirming with an outside agent, such as a financial institution, that the agent is holding investment securities in the client’s name, an auditor most likely gathers evidence in support of management’s financial statement assertions of existence and:

A: Valuation and Allocation

B. Rights and obligations

C.completeness

D. Classification and understandability

the answer is B but why?

[MaLoTu]

They want to know that the company does, in fact, own the securities and they have the rights to any benefit and carry the burden of any loss in regards to the securities in question. B is the more than likely answer because the securities are not being held on the premises, so they do not have physical custody of the securities.

[jamel44]

Ok I understand that. Thanks but is there a tool or a way of studying Financial assertion for the exam. I seem to get those answers wrong when I am doing the multiple choice question.

[Author]

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