Audit assertions: the 7 ISA criteria to make your accounts more reliable in 2026

Audit assertions are the criteria (occurrence, completeness, measurement, cut-off, rights and obligations, valuation and allocation, presentation) against which the statutory auditor assesses whether the accounts are lawful, fair and give a true and fair view. Defined by NEP 315, they connect each risk of material misstatement to a targeted procedure and to audit evidence.

The audit assertions are the fundamental criteria which allow the auditor - auditor or external auditor - to assess whether the financial statements are regular, sincere and give a faithful image of the situation of the company. Far from being a theoretical formality, they structure the entire audit process: identification of risks, design of procedures, collection of evidence and formulation of conclusions.

Defined by the international standard ISA 315 (IFAC) and, in France, by the revised NEP 315 that converges with it (applicable to financial years beginning on or after 19 November 2024), the assertions are structured around three families: flows of operations and events, account balances, and information presented in the accounts (notes).

An audit without assertion-based reasoning is a succession of disconnected tests, without a common thread or risk response logic. Assertions create the essential chain between:

1. The identified risk: where could the accounts be significantly erroneous, and why?
2. The threatened assertion: what property of the financial statements does this risk call into question?
3. The adapted procedure: what tests make it possible to collect conclusive éléments on this assertion?
4. The documented conclusion: what assurance can the auditor draw from the éléments obtained?

NEP 315 : French equivalent of IFAC ISA 315 : requires the auditor to identify and assess the risks of material misstatement at the level of the accounts taken as a whole and at the assertion level. It is at this second level that the approach truly becomes operational.

The three families of assertions in NEP 315#

NEP 315 does not refer to "seven assertions": it groups them into three families, depending on whether they relate to flows, balances or the notes. The table below uses the French normative wording. The grouping into "7 key criteria" used further down is a teaching consolidation, useful for mapping risks, but with no normative value.

These criteria underpin the lawful, fair and true-and-fair presentation of the accounts.

1. Existence (or occurrence for flows)#

For account balances: assets, liabilities and equity actually exist on the closing date. Inventory recorded on the balance sheet corresponds to goods physically present and belonging to the company.

For transaction flows: the recorded transactions have taken place and concern the entity. A recorded invoice corresponds to a service actually provided.

Concrete example: for an industrial SME, the assertion of existence on stocks will be tested by taking a contradictory physical inventory or by observation procedures on items with a high financial stake.

2. Completeness#

All transactions, events and balances that should have been recorded are actually recorded. Completeness is often the most difficult assertion to test: we look for what is absent, by definition invisible in the accounting data.

Concrete example: testing the completeness of supplier debts requires searching for goods and services received but not yet invoiced (unrecorded liabilities, i.e. accrued charges) and sending external confirmation requests to strategic suppliers. NEP 505 ("Requests for confirmation from third parties") governs these confirmations.

3. Rights and obligations#

The entity owns or controls the rights relating to the recognized assets (ownership, right of use in IFRS 16), and the liabilities represent obligations incumbent upon it. This assertion takes on particular importance for fixed assets, intangible assets and financial leasing contracts.

Concrete example: for a firm holding client funds, the assertion of rights will be tested by verifying ownership deeds, contracts and segregated account statements.

4. Valuation and allocation#

Assets, liabilities, income and expenses are recognized at the appropriate amounts, in accordance with the rules in force (general accounting plan, IFRS according to the applicable framework). This covers the correct valuation of securities, provisions, goodwill and financial instruments.

Concrete example: the evaluation of a provision for litigation requires an updated legal analysis, a review of discussions with lawyers and an assessment of the probable exit risk : in accordance with articles 322-1 (recognition) and 323-2 (measurement at best estimate) of regulation ANC 2014-03 (French general accounting plan).

5. Separation of exercises (cut-off)#

Transactions are recorded in the correct accounting period. The cut-off is particularly sensitive at the end of the financial year, on purchases and sales close to the closing date, and on accrued expenses or income receivable.

Concrete example: an auditor will check the last deliveries of December and the first of January to ensure that the income and expenses are attached to the correct financial year, in accordance with the principle of independence of financial years (article L.123-21 of the Commercial Code and the French general accounting plan).

6. Présentation and information provided in the notes#

Items are correctly classified, described and presented in the financial statements. The information required by the texts (Commercial Code, ANC regulations, IFRS) is included and intelligible. This assertion covers all accompanying notes: off-balance sheet commitments, rémunération of corporate officers, transactions with related parties. Concrete example: for a listed company, verification of the présentation assertion on related parties will require cross-checking management déclarations with conflict of interest registers and regulated agreements approved at the general meeting.

7. Accuracy#

Amounts and other transaction data are recorded correctly. This assertion differs from évaluation: it concerns arithmetical fidelity and compliance with contractual parameters, rather than value judgments.

Concrete example: for personnel costs, accuracy will be tested by recalculating gross salaries, employer contributions and the bases for calculating benefits in kind, by cross-checking with pay slips and DSN déclarations.

NEP 330 (auditor responses to assessed risks) distinguishes two main families of procedures:

Tests of controls: they aim to verify that internal controls designed to prevent or detect anomalies are working effectively. They are relevant when the auditor intends to rely on internal control to modulate the extent of its substantive procedures.

Substantive procedures: they include detailed tests (circulation, invoice control, physical counting) and analytical procedures (comparisons, ratios, variance analyses). Their design must be directly linked to the assertion tested and the risk assessed.

The risk/assertions/procedures mapping is the cornerstone of a well-structured audit file, in line with the requirements of the H2A (Haute Autorité de l'audit), which succeeded the H3C on 1 January 2024.

Connecting assertion, risk and procedure: the decision table#

In practice, an audit file reads like a table connecting each sensitive assertion to a risk, a procedure and the standard applied. Here is how we use it on the most exposed items.

For a risk assessed as significant within the meaning of NEP 315, substantive procedures specifically designed to respond to it remain mandatory, regardless of the quality of internal control.

For an SME submitted to the statutory auditor, the most often critical assertions are:

• Completeness of debts and accrued liabilities, particularly in a context of rapid growth where closings are less formalized
• Inventory évaluation in industrial or trading companies (CUMP, FIFO methods, dépréciation)
• Cut-off on turnover, particularly sensitive in service activities or partial deliveries
• Présentation of off-balance sheet commitments, often incomplete in SMEs (guarantees, pledges, leasing contracts)

Hayot Expertise Advice: audit assertions are not abstract theory. In practice, they allow your auditor to prioritize his work on the truly exposed areas of your accounts : and to provide you with targeted assurance, not a superficial review. A good audit file reads like a risk map linked to reasoned responses.

Representative case: a fast-growing trading SME#

A frequent situation in audit files: a trading SME doubles its turnover in two years, but its closing procedures have not kept pace. The most exposed assertions are not spread at random.

• Completeness of liabilities: at year-end, several December deliveries are not yet invoiced. Without a review of unrecorded liabilities, profit would be overstated.
• Valuation of inventory: the rise in volume hides slow-moving items whose impairment has not been reviewed.
• Cut-off: sales shipped after the closing date were recorded early to "meet" the target.

The audit plan then focuses on these three assertions: a search for unrecorded liabilities, testing of inventory impairment and cut-off testing around the closing date. It is this prioritisation, rather than a uniform review, that distinguishes a useful file from a surface-level check.

ISA 315 (Revised 2019), declined in France as the revised NEP 315 (applicable to financial years beginning on or after 19 November 2024), requires the auditor to assess the risks of material misstatement at two levels: the accounts taken as a whole, and individual assertions. This double reading is fundamental:

• A risk at the financial statement level (example: faulty accounting system, pressure on results) requires a global response to the conduct of the mission.
• A risk at the level of a specific assertion (example: existence risk on the customer receivables of a service company) requires a targeted procedure, scaled to the issue.

ISA 330 (paragraph 21) and NEP 330 specify that, for significant risks : that is to say those which require particular attention : the auditor cannot rely solely on tests of procedures: specific substantive procedures are mandatory.

To go further, consult what is an audit?, mission of the auditor and zoom SME financial audit.

Our team supports SME managers, financial directors and boards of directors in understanding and optimizing their audit work. Whether you are submitted to the auditors or you wish to structure an internal review, we can help you link risk mapping, targeted assertions and adapted procedures.

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