Now here’s one thing that no manager wants to do because mistakes in this process can end careers. The thing is that sooner or later someone must sit down and crunch the numbers. The name of such fearsome task is management assertions.


Management assertions (also known as financial statement assertions) refer to the implicit or explicit assertions of the one responsible for preparing the financial statements, usually management. It includes the recognition, measurement, presentation, and disclosure of the financial information inside the statements. Management assertions are usually used for the audit of a company’s financial statements.

It is the auditor’s job to find evidence of whether management’s assertions can be corroborated, and you can be sure auditors can smell fraud. Imagine the pressure of putting your name on such a document, you better make sure to check it ten times at least.

Types of Management Assertions

Most management assertions fall into the following three classifications:

  • Transaction-level assertions. The assertion is that the full amounts of all the transactions, businesses events to which the company was subjected, and the correct accounts in the general ledger were recorded accurately without error and within the correct reporting period.
  • Account balance assertions. The assertion is that all account balances exist for assets, liabilities, and equity have been recorded at their proper valuations, fully reported accurately witout error, and within the correct reporting period. The entity has the rights to the assets it owns and is obligated under its reported liabilities.
  • Presentation and disclosure assertions. The assertion is that all information disclosed is in the correct amounts, reflects their proper values, has been appropriately presented, and is understandable. Also, all transactions that should be disclosed have been disclosed, have occurred, and the rights and obligations that relate to the reporting entity have been disclosed.

There’s a lot of repetition between the different assertions, but that’s because of how important management assertion is. You must make sure everything has been properly written, on time, and where is supposed to be. Don’t be an idiot and cover your back.