Procedures to test whether sales are accurately recorded are normally:
A) superfluous during substantive testing.
B) necessary only if the controls are weak.
C) conducted in every audit.
D) skipped unless fraud is suspected.

Question

Quizplus · Accepted Answer

Testing of sales recording accuracy is a standard procedure in every audit. This is because sales are a significant source of revenue for an entity and any misstatement in the sales figure can have a material impact on the financial statements. Therefore, auditors always include substantive procedures to test the accuracy of sales recording, irrespective of the strength of controls or suspicion of fraud.

Procedures to Test Whether Sales Are Accurately Recorded Are Normally