【正文】 is assertion, the taxpayer is asserting that the transactions reported actually occurred in the period. For example, the taxpayer asserts that reported purchase transactions represent exchanges of goods or services that actually took place.The occurrence assertion is concerned with the risk that transactions are included that should not have been reported. Thus, violations of the occurrence assertion relate to overstatements. Reporting a purchase transaction that did not occur is a violation of the occurrence assertion, and results in the overstatement of an expense, understatement of taxable ine and understatement of tax payable.2． Completeness This assertion is concerned with whether all transactions that should be included in the return, are in fact included. For example, the taxpayer asserts that all sales of goods and services are recorded and included in the return. The pleteness assertion addresses matters opposite from the occurrence assertion. The pleteness assertion is concerned with the risk that transactions were omitted that should have been reported. Violations of the pleteness assertion relate to understatements. The failure to report a sale that did occur is a violation of the pleteness assertion, and results in the understatement of ine, understatement of taxable ine and understatement of tax payable. 3． Accuracy The accuracy assertion addresses whether transactions have been reported at correct amounts. Reporting the wrong amount for a transaction is an example of a violation of the accuracy assertion. This results in the incorrect calculation of expenses and ine, incorrect taxable ine and incorrect tax payable. Incorrect calculation of GST on purchases and sales transactions also violates the accuracy assertion.4． Classification The classification assertion addresses the risk that transactions are not recorded in the appropriate categories. Recording a sale as a domestic sale instead of as an export sale is one example of a violation of the classification assertion. Pricing of sales using incorrect product codes results in incorrect sales, taxable ine and tax payable.5． Cutoff The cutoff assertion addresses whether transactions are recorded in the proper fiscal period. Cutoff is a particular concern near the end of the fiscal year. Reporting a purchase in June that belongs in July (. the next fiscal year) violates the cutoff assertion. This has the effect of increasing the purchases in the current fiscal year, thereby reducing taxable ine and tax payable.When conducting audits, auditors use a set of audit objectives that correspond to these assertions. These objectives are hypotheses that can be tested by collecting sufficient, appropriate audit evidence. These audit objectives are applied to each type of transaction reported in a tax return. This is illustrated below for sales transactions. An example of an audit procedure to test each objective is provided.Table 1 – Audit Objectives and Procedures for Sales TransactionsAssertionAudit Objective for Sales TransactionsAudit Procedure to Test the Audit ObjectiveOccurrenceReported sales are for shipments actually made to customersTrace a sample of sales transactions to supporting documents, including invoices, shipping documents, and customer orders, to check that the transactions actually occurred.CompletenessAll existing sales transactions are reportedTrace a sample of shipping documents to sales records to check that all are recorded as sales.AccuracyReported sales are for the amount of goods shipped and are correctly billedTo check sales amounts, recalculate these amounts using prices and quantities for a sample of recorded sales.ClassificationSales transactions are properly classifiedCheck the classification for a sample of sales transactions.CutoffSales are reported in the correct fiscal yearCompare dates of a sample of recorded sales with shipping dates to check that they are recorded in the correct fiscal year.4．Computer Assisted VerificationTaxpayers who are businesses normally have an IT system for recording transactions and reporting, and producing financial statements and other reports to the ATO, . a Business Activity Statement. The ATO has acknowledged that it is costeffective to perform some audit procedures for an auditee using CAV software. This involves:1． Obtaining electronic records from the taxpayer’s IT system。 and2． Using specialised CAV software to perform audit procedures to test the occurrence, pleteness, accuracy, classification and cutoff audit objectives.The ATO uses IDEA and ACL, which are industryleading auditing software. Under legislation, the ATO has full and free access to taxpayer records, including electronic information. With the assistance of ATO staff, the taxpayer’s electronic records are extracted from their IT system. Many accounting systems have functions for ‘exporting’ data and this is most monly used for data extraction. In certain cases, reports are exported as pdf files. This data is then imported into the CAV software. Further information can be obtained from Many audit procedures must be performed manually. For example, where source documents must be examined, this is a manual procedure. Such procedures are usually limited to the examination of a sample of transactions. Where procedures can be performed electronically, however, they can be applied to all records. It is also mon to use CAV software on procedures that would be impossible to perform manually. For example, paring accounting records with bank statements, to detect duplicate records or omissions is usually not feasible if done manually because of the large volumes involved.To demonstrate the capabilities of CAV software, we will use the audit of a busy restaurant as an illustration.Toscani is a large Italian restaurant. IT systems are used for the kitchen and for the accounting records. Each table in the restaurant is numbere