When performing tests of controls and tests of transactions for sales, the auditor generally defines the population as:
A) all accounts receivable transactions for the year.
B) all sales invoices for the year.
C) all cash receipts transactions for the year.
D) all sales invoices less sales return credit memos.

Question

Quizplus · Accepted Answer

The population for tests of controls and tests of transactions for sales should be all sales invoices for the year. This will enable the auditor to test the completeness, accuracy, and existence of sales transactions. Including accounts receivable transactions or cash receipts transactions would not provide sufficient information for these tests. Excluding sales return credit memos would also not provide a complete picture of sales transactions.

When Performing Tests of Controls and Tests of Transactions for Sales