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Dear Sir,
Good day.
Please clarify me concerning below:
Does comparing payroll expenses to that of last year give assertion of both completeness and accuracy?
Regards,
AvinashI am not sure what you mean by “give assertion” but, as a substantive procedure, comparing total payroll expense against the prior year (and investigating any significant differences) would provide evidence that is relevant to the financial statement assertions of completeness and accuracy.
Okay sir but does it mean that analytical procedures performed bu comparing ratio will only concern completeness and accuracy?
It does not provide evidence for other assertions .. Right?As a generalisation, yes, but it depends on what the analytical procedure is. It could be relevant to assertion of cut-off (e.g. month-on-month sales revenue) or classification (e.g. distribution/admin costs as proportion of revenue).
Clearly though an analytical procedure is not relevant to assertions of rights/obligations and existence.
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