For each of the following potential misstatements, provide one potential audit test that could be used to detect the misstatement.

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For each of the following potential misstatements, provide one potential audit test that could be used to detect the misstatement.

• Recorded sale for which there was no shipment
• Sale recorded more than once
• Shipment made to nonexistent customers



Answer:

The potential audit tests include the following:

• Recorded sale for which there was no shipment. Vouch selected entries in the sales journal to related copies of shipping and other supporting documents.
• Sale recorded more than once. Review a numerically sorted list of recorded sales transactions for duplicate numbers. The auditor may also test for proper cancellation of shipping documents.
• Shipment made to nonexistent customers. Trace customer information on sales invoices to the customer master file.

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