@hopeful cpa , here are my thoughts ,
question 1: A material weakness that exists at year end may result in what type of audit opinion when conducting an audit of a public company’s internal control?
This question is pretty vague and tricky and I'm not too certain of my answer.
question 2: If the objective of an auditor’s test of details is to detect a possible understatement of sales, the auditor most likely would trace transactions from the :
the answer to this is C. Shipping documents to the sales invoices.
The reason is , we are trying to detect an understatement . the rule of thumb is
Tracing (source documents into the books and records to see if something was recorded) this is to verifiy the completeness assertion and to detect understatements.
Vouching( books into the source documents to see if something existed) this is to verify the occurence/existence assertion.
therefore , if you wanted to know whether a sale was recorded you would inspect the shipping documents and see if the sales were recorded.
If you wanted to see if the sale ever existed or occurred. you would check your sales invoices and look for evidence that suggests the sale had occurred in that case it would be a shipping document.
so the rule of thumb is tracing(source into the books and records) detects understatements / verifies completeness
vouching(books and records into the source) detects overstatements / verifies existence,
.