When Designing Audit Procedures, Tracing of Source Documents to the Customers

question 126

Multiple Choice

When designing audit procedures, tracing of source documents to the customers subsidiary ledger and subsequently to the general ledger is done to satisfy what assertion?

• A) valuation
• B) cutoff
• C) completeness
• D) classification

Recognize the purpose and necessity of adjusting entries in the preparation of financial statements.

Identify indicators that signify the completion and balance of an end-of-period spreadsheet.

Understand the relationship between the end-of-period spreadsheet and financial statement preparation steps.

Practice distinguishing account types and where they are reported on financial statements.

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Definitions:

Fraud

Deliberate deception to secure unfair or unlawful gain, or to deprive a victim of a legal right.

Demand An Accounting

A legal request for a detailed report of financial transactions and balances, typically made by stakeholders to ensure transparency.

Forensic Auditor

A professional who examines financial records to detect or investigate fraud, ensuring legal compliance and integrity.

Commissions

Earnings based on a percentage of the sale price of goods or services, typically used as compensation for sales personnel.