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CA Intermediate · Auditing and Ethics · Audit Evidence

During the audit of Surya Pharma Ltd, the auditor wants to test whether all goods dispatched were actually billed (completeness of revenue). Which procedure is most directed at this assertion?

Selecting dispatch records and tracing them to sales invoices and the sales register is the right response. Completeness requires testing from the source documents forward to the books to find unrecorded sales. Vouching from the register back to dispatch documents tests occurrence, which is the opposite direction.

  1. ASelect sales invoices from the sales register and vouch them to dispatch documents
  2. BSelect dispatch records (gate passes) and trace them to the related sales invoices and the sales registerCorrect
  3. CObtain debtor confirmations for large year-end balances
  4. DRecompute the total of the sales register

Explanation

For completeness, the test must start from the source of the underlying transactions (dispatch records) and trace forward to the accounting records. Starting from the sales register and going to dispatch documents tests occurrence, not completeness. Debtor confirmations mainly address existence, and recomputation addresses accuracy.

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