Part 2 Management Assertions (16 points) I. Conceptually, management makes assertions about the financial statements. (1) Define, or explain, what is meant by management assertions. (2) How does the concept of management assertions help the auditor in auditing an entity's financial statements? Discuss. I ? I a II. Indicate the most applicable of each of the following assertions. Use only ONE letter for each item. Assertions about Classes of Transactions and Events and Related Disclosures, for the period under audit: A. Occurrence D. Cutoffe B. Completeness E. Classificatione C. Accuracy F. Presentatione Assertions about Account Balances and Related Disclosures, at the period end. G. Existence J. Accuracy, Valuation and Allocation H. Rights and Obligations K. Classification I. Completeness L. Presentation Items: 1. Items on the inventory listing can be located in the company's warehouse. + 2. The company actually owns inventory found in its warehouse. 3. Purchases in transit at year-end shipped FOB destination are properly excluded in the company's accounts. 4. Recorded trade accounts receivable relate to actual sales. Answers (USE ONLY ONE LETTER) 1. 2. _ 3. - 4. _