Auditors consider fi nancial statement assertions to identify appropriate audit procedures. For
items a through f, match each assertion with the statement that most closely approximates its
meaning. Each statement may be used only once.

Assertion
a. Completeness
b. Cutoff
c. Existence and occurrence
d. Presentation and disclosure
e. Rights and obligations
f. Valuation

Statement

1. There is such an asset.
2. The company legally owns the assets.
3. All assets have been recorded.
4. Transactions are recorded in the correct
accounting period.
5. Assets are recorded at proper amounts.
6. Assets are properly classified.

Auditors perform audit procedures to obtain audit evidence that will allow them to draw reasonable
conclusions as to whether the client’s fi nancial statements follow generally accepted
accounting principles. Match each audit procedure with its type. Each type of audit procedure
is used; one is used twice.

Audit Procedures

g. Prepare a flowchart of internal control
over sales.
h. Calculate the ratio of bad debt expense
to credit sales.
i. Determine whether disbursements are
properly approved.
j. Confi rm accounts receivable.
k. Compare current fi nancial information
with comparable prior periods.

Type of Audit Procedure
7. Analytical procedures
8. Tests of controls
9. Risk assessment procedures (other than analytical
procedures)
10. Test of details of account balances, transactions,
or disclosures
Auditors perform audit procedures to obtain audit evidence that will allow them to draw reasonable
conclusions as to whether the client’s fi nancial statements follow generally accepted
accounting principles. Match each audit procedure with its type. Each type of audit procedure
is used; one is used twice.