An auditor traces a sample of dispatch notes to entries in the sales journal. Which assertion is primarily tested?
Correct answer: B. Completeness of recorded sales
- A. Occurrence of recorded sales
- B. Completeness of recorded sales
- C. Rights over trade receivables
- D. Valuation of trade receivables
Explanation
Tracing starts with source documents and follows them into the accounting records, so it tests whether transactions have been completely recorded. Vouching from the records back to source documents would more directly test occurrence.
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Auditing examines accounting records and financial statements to determine whether they present a reliable and fairly stated position. The subject covers audit objectives, internal controls, audit evidence, materiality, vouching, verification, working papers, auditor independence, audit reports, and the distinction between an audit and accounting or investigation.
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