What is the accuracy assertion?
ISA 315.A190(a)(iii) defines accuracy for transaction classes: amounts, quantities, dates, and other data relating to recorded transactions and events have been recorded appropriately. This means the price on the invoice, the quantity received, the exchange rate applied, and the resulting calculation must all be supported by underlying evidence.
For disclosures, ISA 315.A190(c)(iv) combines accuracy with valuation into a single sub-assertion: financial and other information is disclosed fairly and at appropriate amounts. This means the auditor tests not only whether a note's monetary figures are correct but also whether narrative descriptions accurately reflect the underlying facts.
Accuracy is the assertion most commonly tested through recalculation and vouching. ISA 330.A22 identifies recalculation as a substantive procedure that directly addresses accuracy by independently checking the mathematical correctness of documents or records. In practice, accuracy testing dominates sampling-based substantive work across most transaction cycles.
Key Points
- Tests whether recorded amounts are correct. The recorded price, quantity, unit of measure, and calculation must all be supported by evidence.
- For transactions: price, quantity, and calculation must be supported by independent evidence — not circular references to the same ledger.
- For disclosures: extends beyond monetary amounts to descriptions, narrative information, and other non-financial data presented in the notes.
- Primary target for sampling-based substantive testing. Recalculation and vouching are the core procedures that directly address accuracy.
Why it matters in practice
The FRC has repeatedly flagged circular accuracy testing as a deficiency. Teams agree an invoice amount to the sales ledger entry and conclude accuracy is satisfied, but the invoice is the source of the ledger entry. This tests only that data was transcribed correctly, not that the underlying amount is right. Accuracy requires tracing the recorded amount back to an independent source: the contract, delivery note, price list, or external confirmation.
ISA 500.A26 distinguishes between internal and external evidence, noting that external evidence obtained directly by the auditor is more reliable. For accuracy, this distinction matters: a supplier price list or a contract price is stronger evidence than an internally generated purchase order. ISA 500.A31 further reinforces that the auditor should consider whether evidence from different sources is consistent — if the contract says one price and the invoice says another, there is an accuracy issue regardless of what the ledger shows.
Key standard references
- ISA 315.A190(a)(iii): Accuracy assertion for classes of transactions — amounts and other data recorded appropriately.
- ISA 315.A190(c)(iv): Accuracy and valuation assertion for disclosures — financial and other information disclosed fairly and at appropriate amounts.
- ISA 330.A22: Recalculation as a substantive procedure that directly addresses accuracy.
- ISA 500.A26: Distinction between internal and external audit evidence and its reliability.
- ISA 500.A31: Consistency of audit evidence obtained from different sources.
Related terms
Related reading
Frequently asked questions
What does the accuracy assertion test?
Accuracy tests whether recorded amounts are correct — the price, quantity, unit of measure, and calculation are all supported by evidence. For disclosures, it extends to descriptions and narrative information, not just monetary amounts. ISA 315 A190(a)(iii) defines it for transactions; A190(c)(iv) covers disclosures.
How is accuracy different from valuation?
Accuracy applies to recorded transactions and disclosure amounts (was the price or calculation correct?). Valuation applies to account balances (are assets and liabilities carried at appropriate amounts under the framework?). A purchase invoice at the wrong amount is accuracy. An investment property at the wrong fair value is valuation.
What is the most common accuracy testing error?
The FRC found that teams frequently test accuracy by agreeing invoice amounts to the sales ledger, which is circular. The invoice is the source of the ledger entry. Accuracy requires tracing the recorded amount back to an independent source: the contract, delivery note, price list, or external system.