CA Inter P5 · Chapter 4 · Question 3 of 14
The auditor of Oorja Electricals Ltd. selects goods dispatch notes issued in the last week of the year and traces them to sales invoices and the sales ledger. This procedure primarily tests which assertion for sales?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Completeness
Explanation
Tracing from source documents (dispatch notes) to the accounting records tests whether all transactions that occurred have been recorded, which is the completeness assertion. Testing in the opposite direction, from ledger entries back to supporting documents, tests occurrence.
More Audit Evidence MCQs
- Q5Management of Tanvi Exports Ltd. refuses to allow the auditor to send a confirmation request to a major customer. Under SA 505, the…
- Q6SA 505 permits negative confirmation requests as the sole substantive procedure for an assertion only when certain conditions are all…
- Q7When inventory is material, SA 501 requires the auditor to attend the physical inventory count, unless impracticable, in order to:
- Q8The auditor of Pankhuri Minerals Ltd. is unable to attend the inventory count at a remote mine because it is in an area declared unsafe…
- Q9The auditor of Riddhi Pharma Ltd. assesses a risk of material misstatement regarding pending litigation and wishes to communicate with the…