DISCUSSION QUESTION

$1.$ You are studying in the campus library for your next internal audit exam with Mark and Ann, two of your classmates.

Mark says: $$I really don$$t understand this vouching and tracing stuff. For example, what difference does it make whether I start with sales invoices and match them with shipping documents or start with shipping documents and match them with sales invoices?$$

Ann replies: $$I don$$t get it either. I hope there$$s nothing on the exam about it$.$

You respond: $$I really don$$t want to take that chance. Professor Smart seems to enjoy asking us hard questions. I think we better figure it out and be prepared. I$$d rather be safe than sorry.$$

Consider the following two audit objectives: $1)$ determine whether sales billed to customers have been shipped and $2)$ determine whether shipments to customers have been billed. Answer the following questions:

a$.$ What is the difference between the two audit objectives?

b$.$ What audit procedure would you perform to achieve each audit objective? Be specific.

c$.$ Why is it important that, for each audit objective, you select the proper document as the starting point for your audit test and match that document with the other document?