Mathematical assertions Resulting from single calculations
Resulting from multiple calculations
-”It is important to realize that a financial statement not only asserts the existence of those items listed in it, it also asserts the nonexistence of those items not so listed” (ibid, p 98)
-“This type of negative proposition presents a different problem to the author. First, it is not as clearly stated or brought as forcefully to his mind as the positive assertion of existence. Second, evidence to establish its validity is more difficult to acquire.” (loc.cit.)
As we well know, the net income figure is affected by a great many components amounts, many of which represent value judgments. The collectability or uncollectible of the accounts receivable must be estimated and a provision must be made for bad debts or those determined to be uncollectible (a value judgment) must be charged to expense. Any error in this particular judgment will carry forward into the net income figure as will errors in numerous other estimates and calculations. (ibid, p. 100)
- “Truth in auditing may be defined as conformity with reality as the auditor con determine reality at the time of his examination and with the evidence available.” (ibid, p. 103)
Types of audit evidence (Mautz & Sharaf, pp. 104-105)
-“Auditing in its entirety is made up of two functions, both closely concerned with evidence. The first is the evidence-gathering function; the second is that of evidence evaluation.” (ibid, p. 105)
Audit Techniques (ibid, p. 121)
Physical examination and count
Confirmation
Examination of authoritative documents and comparison with record
