ACCA AA · Chapter 9 · Question 9 of 10
The auditor of Dowel Co is concerned that revenue may be overstated by recording sales that did not occur. Which procedure is most appropriate?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Select sales invoices recorded in the sales day book and agree them to customer orders and goods dispatched notes
Explanation
To test occurrence, the auditor starts with recorded transactions and seeks evidence that they really happened, so the direction is from the sales day book to supporting dispatch notes and orders. Testing from dispatch notes to recorded invoices tests completeness instead. Casting the day book tests accuracy of totals, not whether sales occurred.
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