Explain the general categories of assertions that companies make during substantive auditing.

Following are the steps elucidating how substantive auditing works in case a company makes assertions: A company's management team makes implicit or explicit claims about their financial situation, and these auditing assertions get presented to an auditor. There are five general categories of assertions that companies make during audits, which are: Occurrence or existence: This assertion states that financial statements listing assets, liabilities and shareholder equity exist when the accounting period is over. Disclosure and presentation: This is an assertion that the financial statements will include and present all financial information and financial disclosures in a clear manner that auditors can easily understand. Obligations and rights: This assertion states that the company has usage rights or ownership of all the assets listed in the financial statements and that all liabilities belong to the company, not a third party. Accuracy or valuation: This assertion states that all the calculations in the financial statements are accurate, classified appropriately and based on a proper valuation of balances, liabilities and assets. Completeness: An assertion that the financial statements include and present all the required items, transactions and inventory, including third parties with temporary possession.