Which of the following is an example of a substantive test that could be used for the audit of the accuracy of sales prices?
A)inspect sales price master authorization forms for the presence of an approval signature
B)observe that the point-of-sale system automatically pulls sales prices from the master file
C)inquire about the process that is used to update sales prices in the sales price master file
D)calculate the gross margin for each product that is sold by the company

Question

Quizplus · Accepted Answer

Calculating the gross margin for each product that is sold by the company would be a substantive test that could be used to audit the accuracy of sales prices. This test would involve comparing the sales price of each product to its cost of goods sold in order to confirm that the sales price was accurate. Inspecting sales price master authorization forms (choice A) would be a test of authorization, not accuracy. Observing that the point-of-sale system pulls sales prices from the master file (choice B) would be a test of processing, not accuracy. Inquiring about the process used to update sales prices in the sales price master file (choice C) would be a test of control, not accuracy.

Which of the Following Is an Example of a Substantive