Final answer:
Financial Reporting contains management's assertions, which are claims regarding the completeness, accuracy, and validity of financial information. Auditors test these assertions to ensure the financial reports are accurate.
Step-by-step explanation:
Financial Reporting contains management's assertions about transactions and events that occurred during the period being audited. These assertions are claims made by management regarding various aspects of the business. For example, assertions relate to the completeness, accuracy, and validity of the financial information presented. Auditors will examine and test these assertions to determine if the financial statements provide a true and fair view of the company's financial position.
The audit process involves verifying that the information presented in the financial report matches the company's actual financial situation. Assertions play a key role in guiding the work of auditors as they help to focus on areas of potential misstatement.