AICPA Exam CPA-Auditing Topic 1 Question 69 Discussion

Actual exam question for AICPA's CPA-Auditing exam

Question #: 69
Topic #: 1

Which of the following audit procedures would an auditor most likely perform to test controls relating to management's assertion concerning the completeness of sales transactions?

AVerify that extensions and footings on the entity's sales invoices and monthly customer statements have been recomputed.

BInspect the entity's reports of prenumbered shipping documents that have not been recorded in the sales journal.

CCompare the invoiced prices on prenumbered sales invoices to the entity's authorized price list.

DInquire about the entity's credit granting policies and the consistent application of credit checks.

Show Suggested Answer

Suggested Answer: B

Choice 'b' is correct. A report on internal control related matters noted in an audit should not state that there are no significant deficiencies in internal control, since this statement might erroneously imply that the auditor searched for such conditions.

Choice 'a' is incorrect. The auditor is permitted to state that no material weaknesses were identified during the audit. Typically this occurs in reports submitted to governmental authorities.

Choice 'c' is incorrect. The auditor may suggest that corrective follow-up action should be taken due to the relative significance of material weakness discovered.

Choice 'd' is incorrect. The auditor's report may state that his or her consideration of internal control would not necessarily disclose all significant deficiencies that exist.

by Andra at Apr 25, 2023, 07:48 AM

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Norah

1 months ago

B is definitely the way to go. I mean, who doesn't love a good prenumbered document inspection? It's like a treasure hunt for accountants!

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Wilford

8 days ago

User 2: Definitely, it's like solving a puzzle to ensure completeness of sales transactions.

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Sol

14 days ago

User 1: I agree, inspecting prenumbered shipping documents sounds like a fun task.

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Gerri

16 days ago

User 1: I agree, inspecting prenumbered shipping documents sounds like a fun audit procedure.

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Gretchen

1 months ago

Hmm, I'm not sure. D) Inquiring about the credit granting policies might also be relevant, as that could reveal potential issues with the sales process.

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Charlena

13 days ago

C) Compare the invoiced prices on prenumbered sales invoices to the entity's authorized price list.

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Alton

19 days ago

B) Inspect the entity's reports of prenumbered shipping documents that have not been recorded in the sales journal.

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Cristina

1 months ago

A) Verify that extensions and footings on the entity's sales invoices and monthly customer statements have been recomputed.

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Jess

2 months ago

I agree, B is the correct answer. Verifying the completeness of the sales record is crucial, and checking the prenumbered shipping documents is a great way to do that.

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Antonio

18 days ago

User 3: I see your point, but I still think B is the most appropriate choice. Inspecting prenumbered shipping documents can help verify completeness.

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Laura

29 days ago

User 2: I disagree, I believe C is the best option. Comparing invoiced prices to the authorized price list ensures completeness.

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Adaline

1 months ago

User 1: I think A is the correct answer. Recomputing the extensions and footings on sales invoices is important for completeness.

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Mattie

2 months ago

B) Inspecting the reports of prenumbered shipping documents that have not been recorded in the sales journal seems like the best way to test the completeness of sales transactions. This would help identify any missing or unrecorded sales.

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