This lesson will help you review the material in the readings. Follow the instructions to progress through the content and answer the questions. You may complete this activity one time. Once you have submitted your response you will not be able to edit it afterward. If you leave the lesson before clicking "submit" on an answer you will be able to re-enter the lesson on that question, however, any prior text entered for that question will be deleted. As mentioned in the Equity Funding: The Fraud of the Century Resources, Equity Funding was one of several frauds that served as an impetus for studies and guidelines implemented subsequent to the 1970s. Just as in the Module 6

The Equity Funding Fraud was a beneficial financial fraud. In auditing the financial statements, auditors are concerned with the five financial assertions:

1. Existence or Occurrence:
   • Managements representation that the assets and liabilities recorded actually exist and occurred.
2. Completeness:
   • All transactions and accounts that should have been recorded have been recorded.
3. Rights and Obligations:
   • Assets represent actual rights and liabilities represent actual obligations.
4. Valuation or Allocation:
   • The assets, liabilities, revenues, and expenses are recorded at the appropriate amounts.
5. Presentation and Disclosure:
   • Recorded amounts are properly classified, described, and disclosed.

Question 7

Which of the five above assertions was most relevant in the Equity Funding Fraud? Explain your answer.