While auditing the sales system of Candle Pty Ltd you have determined that there is a risk of sales being misstated, and that this potential misstatement is associated with the completeness assertion.Which of the following would be an appropriate audit response to this assessed risk?
A)For all debtors greater than 30 days overdue, evaluate whether there is appropriate correspondence with the debtor to encourage repayment of the debt.
B)Select a sample of sales invoices and test to related shipping documents.
C)Select a sample of shipping documents test to related sales invoices and the sales journal.
D)Ensure that the sales order is appropriately authorised.

Question

Quizplus · Accepted Answer

Selecting a sample of shipping documents and testing them to the related sales invoices and sales journal would help to verify the completeness of sales transactions. This would ensure that all sales have been properly recorded in the sales journal and that there are no unrecorded sales. Option A does not directly address the completeness assertion, while option B tests the existence assertion. Option D addresses the authorization assertion but not completeness.

While Auditing the Sales System of Candle Pty Ltd You