Question

Explain why no management assertions for statements of cash folw?

please make 5 point with introduction and conclusion.

3 body paragraph with 3 different points

Answer 1

Following are the few points regarding no management assertions for cash flow statement :

1. Cash flow statement assertions, or management assertions, are a company's official statement that the figures the company is reporting are accurate. So it will reflect our organization liquity of the firm and it will put great impact in the market.
2. Investors and analysts rely on accurate statements to evaluate a company's stock; otherwise, metrics such as the price-to-book ratio and earnings per share would be misleading. So if we think from the clients aspect then also assertions cash flow statement will badly affect.
3. If our financial prepare with all the guidence of GAAP and audited by external auditor which is not mandetory for all types of businees but always advicable. So if we are following the same we will save from assertaion of cashflow statement.
4. We are running directy risk if any such assertaion are there in cash flow statement as it’s the potential bias that a client has regarding an account balance. A client might desire an overstatement of assets and an understatement of liabilities since each makes the balance sheet appear healthier.
5. So if any organization don't want to assertaion cash flow sttement just ask few questions regarding same like as follow :

• Are timely bank reconciliations performed by competent personnel?
• Are all bank reconciled?
• Are the transactions are cut-off at the end of the period of time?

So, Above mentioned all the points refelcts why no management assertions for statements of cash folw.