What is financial statement assertion in SAP FIN-CGV-MIC - Management of Internal Controls?

SAP Term: financial statement assertion

• Component: FIN-CGV-MIC

• Component Name: Management of Internal Controls

• Description: Specifies in which respect the accounts of an account group need to be correct for the financial statement in particular for example, regarding completeness, valuation, or accruals. Controls are particularly relevant for these aspects.

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• Key Concepts: 
  Financial statement assertion is a concept used in the Management of Internal Controls (FIN-CGV-MIC) component of SAP. It is a statement that expresses the expectation that the financial statements of an organization are free from material misstatement due to errors or fraud. It is based on the assumption that the financial statements are prepared in accordance with generally accepted accounting principles (GAAP). 
  
  How to use it: 
  The financial statement assertion is used to ensure that the financial statements of an organization are accurate and reliable. It is used to assess the risk of material misstatement in the financial statements and to identify any potential areas of weakness or fraud. The assertion can be used to evaluate the effectiveness of internal controls and to identify any areas where additional controls may be needed. 
  
  Tips & Tricks: 
  When evaluating the financial statement assertion, it is important to consider both quantitative and qualitative factors. Quantitative factors include the accuracy of the financial statements, while qualitative factors include the reliability of the internal controls and processes used to prepare them. Additionally, it is important to consider any external factors that may affect the accuracy of the financial statements, such as changes in economic conditions or changes in accounting standards. 
  
  Related Information: 
  The financial statement assertion is closely related to other concepts such as internal control, risk assessment, and audit procedures. It is also related to other components of SAP such as Financial Accounting (FI) and Controlling (CO). Understanding these concepts and components can help organizations better understand and use the financial statement assertion.