See, this is the type of example I struggle to read:
To determine whether internal control relative to the revenue cycle of a wholesaling entity is operating effectively in minimizing the failure to prepare sales invoices, an auditor most likely would select a sample of transactions from the population represented by the:
In the revenue cycle of a wholesaling entity, customers are invoiced when goods are shipped. Each shipping document should have a corresponding sales invoice. If a shipping document selected in the sample does not have a corresponding invoice, then the auditor has found a deviation in the tests of controls. Depending on the number of deviations found, the auditor may determine that the internal control to ensure that sales invoices are prepared for goods shipped is not operating effectively. Examining the populations of the sales orders, customer orders, or sales invoices would not tell the auditor if goods were shipped without being invoiced.
OK, but where in the question does it ask how to check if items shipped were being invoiced. Is this common knowledge of wholesaling entities? Is this is anyone's study materials?
Help 🙁
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