Valuation & Allocation Concepts

Flashcards related to the key concepts of valuation, allocation, and accuracy in financial statements.

Valuation

The assertion that all assets, liabilities, and revenues are stated at appropriate amounts.

Allocation

The process of ensuring that amounts recorded are mathematically correct.

Footing

Cross footing schedules with information to ensure correct valuations based on corroborating evidence.

Inspection

A method involving inspecting documentation to determine if reported information is supported.

Recalculation

The auditor's independent recalculations to verify reported numbers through direct evidence.

Reconciliation

The process of aligning supporting documentation with reported amounts in financial statements.