An auditor traced a sample of purchase orders and the related receiving reports to the purchases journal.The purpose of this substantive audit procedure most likely was to
A)Identify usually large purchases that should be investigated further.
B)Verify that cash disbursements were for goods actually received.
C)Determine that purchases were properly recorded.
D)Test whether payments were for goods actually ordered.

Question

Quizplus · Accepted Answer

The purpose of tracing purchase orders and receiving reports to the purchases journal is to determine that purchases were properly recorded. This test ensures that all purchases were correctly recorded in the purchases journal, including both those that were received and those that were not received. It also helps to identify any discrepancies between the purchase orders and the purchases journal, which may indicate errors or fraud. This test does not verify that cash disbursements were for goods actually received (B), identify usually large purchases that should be investigated further (A), or test whether payments were for goods actually ordered (D).

An Auditor Traced a Sample of Purchase Orders and the Related