Which of the Following Audit Techniques Would the Auditor Use

question 1

Multiple Choice

Which of the following audit techniques would the auditor use to test the completeness of sales (i.e. ,test whether shipments have been billed to customers) ?

• A)trace shipping documents to duplicate sales invoices
• B)trace duplicate sales invoices to shipping documents
• C)match data file versions of sales invoices to paper records
• D)look at subsequent payments after the year end for payments for outstanding invoices

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Definitions:

Comprehensive Income

A measure of all changes in equity of a company that result from recognized transactions and other economic events of the period other than those resulting from investments by and distributions to owners.

Retained Earnings

Profits that a company keeps or retains after paying dividends to shareholders, which are often reinvested in the business or used to pay down debt.

Accumulated Other Comprehensive Income

The cumulative effects of other comprehensive income items reported separately in the Stockholders’ Equity section of the balance sheet.

Long-Term Investments

Assets intended to be held for more than one fiscal year, including bonds, stocks, or real estate, aiming for future returns.