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What is the occurrence assertion on the income statement?

The occurrence assertion related to whether the transaction and event that was recorded actually occurred. For example, if Tahoe Ski Mountain recorded the sale of skis to Larry Brown, then the audit team would request evidence to support the fact that the transaction actually occurred!

To test the occurrence assertion, the audit team could send confirmations to the customer and have the customer confirm that the sale was a real transaction. The audit team could also obtain invoices and bank information to vouch and verify the customer actually paid.

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  • What are the different audit assertions?

    The three main levels are transactions & events (income statement activity) account balances (balance sheet activity), and then presentation & disclosure (information in the financial statements). Each of these assertion levels have management assertions that are important and should be interpreted in a specific manner. 1) Transaction & Events: The transaction & events assertions relate to the income statement and the activity throughout the year. There are five key assertions to assess under transaction & events. 2) Account balances: The balance sheet assertions are referred to as the account balance level of assertions. There are four main assertions related to account balances. 3) Presentation & disclosure: These assertions are related to the presentation of information within the financial statement as well as their accompanying disclosures.