To test the existence assertion for recorded receivables,an auditor would select a sample from the:
A)Sales orders file.
B)Customer purchase orders.
C)Accounts receivable subsidiary ledger.
D)Shipping documents (bills of lading)file.

Question

Quizplus · Accepted Answer

The accounts receivable subsidiary ledger contains individual customer accounts and corresponding recorded receivables. Selecting a sample from this ledger will enable an auditor to test the existence assertion for recorded receivables by verifying that the sampled accounts represent actual receivables owed to the company. Samples from sales orders or customer purchase orders would not necessarily provide evidence of receivables that have been recorded, while samples from shipping documents would test the completeness assertion rather than existence.

To Test the Existence Assertion for Recorded Receivables,an Auditor Would