An auditor is testing the completeness of sales. Which of the following audit trails represents the correct direction of testing?

Answer options:

Sales journal to sales invoices to shipping documents.

Shipping documents to sales invoices to sales journal.

Accounts receivable ledger to shipping documents.

Cash receipts to accounts receivable ledger.

How to approach this question

Completeness = Tracing (Source -> Book). Existence = Vouching (Book -> Source).

Full Answer

B.Shipping documents to sales invoices to sales journal.✓ Correct

Shipping documents to sales invoices to sales journal.

To ensure all sales are recorded (Completeness), the auditor traces from the source document (Shipping Document) forward to the Sales Invoice and then to the Sales Journal.

Common mistakes

Confusing Vouching and Tracing.

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