Question

equired for each specific balance-ruut assertion. (Hint: See Table 6-5 on p. 165.) 6-32 (OBJECTIVES 6-8, 6-9) The following are specific transaction-related audit objectives applied to the audit of cash disbursement transactions (a through f.), management asser- tions about classes of transactions (1 through 5), and general transaction-related audit objectives (6 through 11).

Answer 1

A. Management assertions are implicit or explicit assertions used by the management in the preparation and presentation of financial statements to convey certain things to the users of financial statements. These have been defined under GAAP and auditing standards as well and include 5 assertions as mentioned in the question.

General transaction-related audit objectives include all the management assertions plus they have been further expanded in order to help the auditor determine the amount of evidence that is required for each financial statement line item.

Finally specific transaction-related audit objectives are the objectives that have been determined by the auditor in respect of a process or financial statement line item to meet the general transaction-related audit objectives. These objectives are set for every transaction to determine the level of audit evidence appropriate for the transaction as per the facts and circumstances.

B.

S. No.	Specific audit objective	Management Assertion
a	Cash disbursements transactions are recorded	Completeness
b	Recorded cash disbursement transactions are for the amount of goods or services received	Accuracy
c	Cash disbursement transactions are properly included in the accounts payable master file	Completeness
d	Recorded cash disbursements are for good and services actually received	Occurrence
e	Cash disbursement transactions are properly classified	Classification
f	Cash disbursement transactions are recorded on the correct dates	Cutoff

C.

S. No.	Specific audit objective	General transaction related audit objective
a	Cash disbursements transactions are recorded	Completeness
b	Recorded cash disbursement transactions are for the amount of goods or services received	Accuracy
c	Cash disbursement transactions are properly included in the accounts payable master file	Posting and Summarization
d	Recorded cash disbursements are for good and services actually received	Occurrence
e	Cash disbursement transactions are properly classified	Classification
f	Cash disbursement transactions are recorded on the correct dates	Timing