When the client's internal control structure is adequate,the cutoff can usually be verified by
A)the client's representation letter.
B)inquiries of the controller.
C)obtaining the last shipping document number of the year and comparing it with current and subsequent period recorded sales.
D)confirmation of the receivable for the last recorded sale.

Question

Quizplus · Accepted Answer

Obtaining the last shipping document number of the year and comparing it with current and subsequent period recorded sales is the best way to verify cutoff when the client's internal control structure is adequate. This method ensures that all sales for the year have been recorded in the correct period and that no sales have been recorded in the subsequent period. The other choices may provide some information but are not as reliable or effective in verifying cutoff.

When the Client's Internal Control Structure Is Adequate,the Cutoff Can