When undertaking tests of controls for revenues, auditors are more concerned with controls associated with the occurrence assertion than they are with the completeness assertion because:
A)clients are more likely to overstate than understate revenues.
B)clients are more likely to understate than overstate revenues.
C)it is difficult to determine when services have been performed.
D)the allowance for doubtful accounts is often understated.

Question

Quizplus · Accepted Answer

Clients are more likely to overstate revenues, so auditors are more concerned with controls associated with the occurrence assertion to ensure that revenue is only recorded when it has actually been earned. Controls associated with the completeness assertion are more focused on ensuring that all revenue transactions are recorded, which is less of a concern if the client is more likely to overstate revenues.

When Undertaking Tests of Controls for Revenues, Auditors Are More