Management Assertions. Your audit manager has asked you to explain the PCAOB assertions by using an account on the balance sheet at your audit client. For the accounts receivable account, please define each of the PCAOB assertions, using the accounts receivable account as a way to illustrate each assertion. You are encouraged to reference Exhibit 1.5 to help you answer this question.

EXHIBIT 1.5 Management Assertions ASB Assertions (1) (2) (3) (4) (5) Assertions Assertions about Events Assertions about Presentation and about Account and Footnote PCAOB Assertions Transactions Balances Disclosures Key Questions Existence or Occurrence Existence Occurrence Do the assets listed really exist? occurrence Did the recorded sales transactions really occur? Rights and Rights and Rights and Does the company really own the obligations obligations obligations assets? Are all legal responsibilities to pay the liabilities identified? Completeness Completeness Completeness Completeness Are the financial statements (including footnotes) complete? Were all transactions recorded? Cutoff Are transactions included in the proper period? Valuation or Accuracy Valuation and Accuracy Are the accounts valued correctly? allocation allocation Valuation and Are expenses allocated to the allocation period(s) that were benefited? Presentation Classification Classification Were all transactions recorded in and disclosure the correct accounts? Understandability Are the disclosures understandable to users