A Risk of Material Misstatement in Accounts Receivable Associated with the Accuracy

question 71

Multiple Choice

A risk of material misstatement in accounts receivable associated with the accuracy balance-related audit objective is that "sales recorded at the incorrect price result in revenue and accounts receivable that are over- or understated." Which of the following tests of detail of balances would respond to this risk?

• A)Select a sample of master file change forms and verify that all sales prices changes were appropriately authorized.
• B)Use audit software to match sales invoice price details to authorized prices in the sales price master files.
• C)Enquire with management with respect to the procedures used to update the sales price master file.
• D)Match shipping details for a sample of invoices to the invoice details on an item by item basis.

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