An auditor is testing the completeness of sales. Which of the following audit procedures should the auditor perform?

Answer options:

Select a sample of entries in the sales journal and vouch them to shipping documents.

Select a sample of shipping documents and trace them to the sales invoices and sales journal.

Select a sample of accounts receivable and confirm them with customers.

Review the sales journal for unusually large transactions.

How to approach this question

Direction of Testing: Vouching (Journal -> Source) = Existence. Tracing (Source -> Journal) = Completeness.

Full Answer

B.Select a sample of shipping documents and trace them to the sales invoices and sales journal.✓ Correct

To test Completeness (understatement), the auditor starts from the source documents (Shipping Documents) and traces them forward to the accounting records (Sales Journal). This ensures that all goods shipped were actually recorded as sales.

Common mistakes

Confusing Vouching (Existence) with Tracing (Completeness).

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