Which of the Following Audit Procedures Is the Most Effective

question 78

Multiple Choice

Which of the following audit procedures is the most effective when testing sales for understatement?

• A)Scrutinize the accounts receivable aged trial balance.
• B)Confirm a sample of recorded accounts receivable.
• C)Trace a sample of shipping documents to sales invoices recorded in the sales journal.
• D)Vouch a sample of recorded sales from the sales journal to shipping documents.

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Definitions:

Mean

The average of a set of numerical values, calculated by adding them all up and dividing by the number of values.

Equal

Having the same value, quantity, measure, or meaning as another; identical in magnitude or degree.

Population Standard Deviation

Population standard deviation is a measure of the spread or dispersion of a set of data points in a whole population.

Set of Data

A collection of data points or values that have been gathered to provide information for analysis, often organized in a structured manner such as a list, table, or database.