1.Meaning of the word ASSERTION. KINDLY brief on the same.
2. Incase of SA 505, after how much reasonable time should a follow up be sent?
3. Kindly clarify this for professional ethics Membership of professional bodies outside India whose qualification related to accountancy are recognised by council are eligible to indulge in partnership with practicing CA(clause 4) but profits of CA can not be shared in both routes with them(clause 2 &3)?
Assertion means representations made by management about financial data.
If they say land and building is 100 crore
They are asserting / representing
It is real — that means EXISTENCE
Nothing is left out — it is COMPLETE
Amount is proper — it is properly VALUED
They have ownership rights — RIGHTS & OBLIGATIONS
Above can be also called features of financial data.
Risk is identified at assertion level
Controls are tested for such assertions
Evidence is collected at assertion level
Conclusion is made for assertuons
It makes audit process efficient and effective.
No time specified in SA 505, if auditors feel it is taking more than usual time to get replies then he should ask to send requests again. So comparison should be with past or same industry and area.
CA in practice cannot do partnership with foreign professionals. And not even sharing in 2 and 3.
Till 1997 few foreign professionals were given automatic route to become memeber in india and once they become member we can do partnership with them, such rule is scrapped now for past 20 years and now no such partnerships can be done.