CAF-8 · Chapter 6 · Question 5 of 10
The auditor of a wholesale company is testing the completeness of dispatched goods. Which of the following tests of controls specifically addresses the risk that goods have been shipped but not billed?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Select a sample of sequential dispatch notes and trace them forward to the corresponding sales invoices in the ledger.
Explanation
To test for completeness of billing, the auditor must start from the source document of the physical movement (the dispatch note) and trace it forward to ensure an invoice was actually generated. Tracing backward tests for occurrence.
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