Management assertions are accounting statements that management makes about their organization’s finances. This can include assertions about assets, liabilities, equity, revenue, and expenses. Management assertions help provide transparency into an organization’s financial status and give stakeholders confidence in the numbers that are being reported.
Assertions about assets, for example, can include information such as whether all assets are properly accounted for and valued correctly. Assertions about liabilities might include whether all liabilities are properly recorded and whether they will be paid when they come due. Equity assertions might include whether the organization’s ownership structure is accurately reflected in its financial statements. Revenue assertions might include whether all revenue has been properly reported and recognized. Expense assertions might include whether all expenses have been properly recorded and whether they are reasonable.
Management assertions can be made explicitly in financial statements or footnotes, or they can be implied through the overall tone and presentation of the statements. Either way, they provide important information about an organization’s finances and help to build trust with stakeholders.