If the auditor is auditing revenues and identifies gaps in the sequence of pre-numbered sales invoices, _______.
A)the auditor is unlikely facing a completeness problem, even if the file reconciles with the general ledger
B)the auditor may be facing a completeness problem, even if the file reconciles with the general ledger
C)the auditor may be facing a valuation problem, even if the file reconciles with the general ledger
D)the auditor is unlikely facing a valuation problem, even if the file reconciles with the general ledger

Question

Quizplus · Accepted Answer

Gaps in the sequence of pre-numbered sales invoices suggest that there may be missing transactions, indicating a completeness problem. This issue would exist even if the file reconciles with the general ledger. It is important for the auditor to investigate the cause of these gaps and ensure that all transactions have been recorded accurately in the company's financial statements. A valuation problem would be related to how the transactions are recorded, which is not relevant to the issue of gaps in the sequence of pre-numbered sales invoices.

If the Auditor Is Auditing Revenues and Identifies Gaps in the Sequence