ExpertMedium1 markMultiple Choice
CPA · Question 53 · Area III: Performing Procedures
An auditor is testing the completeness of sales. Which of the following audit trails represents the correct direction of testing?
An auditor is testing the completeness of sales. Which of the following audit trails represents the correct direction of testing?
Answer options:
A.
Sales journal to sales invoices to shipping documents.
B.
Shipping documents to sales invoices to sales journal.
C.
Accounts receivable ledger to shipping documents.
D.
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
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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