Management assertions or financial statement assertions are the implicit or explicit assertions that the preparer of financial statements ( management) is making to its users. These assertions are relevant to auditors performing a financial statement audit in two ways. First, the objective of a financial statement audit is to obtain sufficient appropriate audit evidence to conclude on whether the financial statements present fairly, in all material respects, the financial position of a company and the results of its operations and cash flows. ^[1] In developing that conclusion, the auditor evaluates whether audit evidence corroborates or contradicts financial statement assertions. ^[2] Second, auditors are required to consider the risk of material misstatement through understanding the entity and its environment, including the entity's internal control. ^{[3] [4]} Financial statement assertions provide a framework to assess the risk of material misstatement in each significant account balance or class of transactions. ^[5]

Both United States and International auditing standards include guidance related to financial statement assertions, although the specific assertions differ. The PCAOB and the IFAC address this topic in AS 1105 ^[6] (updated from AS 15 ^[7] as of December 31, 2016) and ISA 315, respectively. ^[4] The American Institute of Certified Public Accountants identifies the following financial statement assertions: ^[8]

1. Transactions and events
   • Occurrence — the transactions recorded have actually taken place.
   • Completeness — all transactions that should have been recorded have been recorded.
   • Accuracy — the transactions were recorded at the appropriate amounts.
   • Cutoff — the transactions have been recorded in the correct accounting period.
   • Classification — the transactions have been recorded in the appropriate caption.
2. Accounts balances as of period end
   • Existence — assets, liabilities and equity balances exist.
   • Rights and Obligations — the entity legally controls rights to its assets and its liabilities faithfully represent its obligations.
   • Completeness — all balances that should have been recorded have been recorded.
   • Valuation and Allocation — balances that are included in the financial statements are appropriately valued and allocation adjustments are appropriately recorded.
3. Presentation and disclosure
   • Occurrence — the transactions and disclosures have actually occurred.
   • Rights and Obligations — the transactions and disclosures pertain to the entity.
   • Completeness — all disclosures have been included in the financial statements.
   • Classification — financial statements are clear and appropriately presented.
   • Accuracy and Valuation — information is disclosed at the appropriate amounts.

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