An auditor decides to vouch a sample of ledger entries back to their original documentation. In terms of whether all transactions had been recorded, this test would be:
An auditor decides to vouch a sample of ledger entries back to their original documentation. In terms of whether all transactions had been recorded, this test would be:
Vouching involves verifying ledger entries by tracing them back to their original documentation. This procedure primarily tests the existence or occurrence objective, ensuring that recorded transactions are supported by actual documentation. It does not address the completeness objective, which is concerned with verifying that all valid transactions have been recorded in the ledger. Completeness testing typically involves tracing from the original source documents to the ledger entries to ensure that no transactions have been omitted. Therefore, vouching is irrelevant to the completeness objective.
Golden Rule - For Completeness of transaction - Check Source data with Accounting record (Tracing)
Why Not A
Because tracing is the completness testing to validate that all trasactions have been recorded in the system. Of course if we put the scenario in place that IA checks all transactions (shipping docs, customer orders, etc.). If we go the other way (vouching) from system to the supporting documentation we cannot confirm completness for all as IA decided to pick a sample. Hope that helps.
choise a is tracking
Vouching for existence assertion , Tracing for completeness assertion. the case here vouching so B is the correct answer.
He needs to perform a second procedure. The current test is not relevant for the second assertion.