Lesson: Assertions, Potential Misstatements, and Subsequent Audit Procedures

This lesson discusses substantive testing procedures, specifically focusing on assertions, potential misstatements, and subsequent audit procedures. By examining various examples of each, the lesson emphasizes the importance of thoroughly proving assertions and addressing potential issues that may arise during an audit. The relevant assertions covered include existence, completeness, and inventory held at outside locations. For each assertion, potential misstatements are explained, as well as the audit procedures to detect or remedy those misstatements, such as physically examining inventory items or obtaining confirmations for inventory held at outside locations. As Nick Palazzolo, CPA, explains, real-life audits can vary significantly, but this lesson focuses on standard practices used across different industries.