Classification assertion
Classification concerns whether transactions, events, balances and disclosures are recorded or presented in appropriate accounts and categories under the applicable framework. Auditors inspect the nature and terms of items and evaluate the entity’s classification.
Worked example
The auditor examines a lease agreement and considers whether the associated liability is split correctly between current and non-current amounts.
Common mistake
Do not assume a figure is appropriately classified merely because its arithmetic is correct.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | AA | Direct | September 2026–June 2027 |