Sarah Is Auditing the Sales of a New Client

question 41

Essay

Sarah is auditing the sales of a new client. In one procedure Sarah performs, she begins with the original sales documents and then searches the accounting records to find the corresponding entry. What test is Sarah performing and what management assertion is she testing?

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Definitions:

Incidental Beneficiary

A third party who benefits from a contract between two other parties, albeit without any intention from the contracting parties to benefit the third party.

Contract

A legally enforceable agreement between two or more parties with mutual obligations.

Paving Streets

The process of covering and constructing roads with materials like asphalt or concrete to create a smooth, durable surface for vehicles and pedestrians.

Property Value

The monetary worth that is assigned to a property, based on factors such as market conditions, location, and the state of the property.