Assuming the client’s internal controls are adequate, describe how the auditor can verify proper cutoff of sales transactions.

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Assuming the client’s internal controls are adequate, describe how the auditor can verify proper cutoff of sales transactions.


Answer:

Assuming the client’s internal controls are adequate, the auditor can verify proper cutoff of sales transactions by obtaining the shipping document number for the last shipment made at the end of the period and comparing this number with current and subsequent period recorded sales.

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