ExpertHard1 markMultiple Choice
CPA · Question 69 · Area III: Procedures
An auditor is testing the 'Occurrence' assertion for sales. The auditor should select a sample from:
An auditor is testing the 'Occurrence' assertion for sales. The auditor should select a sample from:
Answer options:
A.
Shipping documents and trace to the sales journal.
B.
The sales journal and vouch to shipping documents.
C.
Customer orders and trace to the sales journal.
D.
Accounts receivable ledger and confirm with customers.
How to approach this question
Occurrence = Did it actually happen? Start with the record (Journal) and look for proof (Shipping Doc).
Full Answer
B.The sales journal and vouch to shipping documents.✓ Correct
To test Occurrence (overstatement), the auditor selects from the accounting records (Sales Journal) and vouches back to the supporting evidence (Shipping Documents) to ensure the sale actually took place.
Common mistakes
Tracing (Completeness) instead of Vouching (Occurrence).
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