QUESTION 17

1. To test for recorded sales for which there were no actual shipments, the auditor vouches from the:

   	a.	bill of lading to the sales journal.
   	b.	sales journal to the accounts receivable subsidiary ledger.
   	c.	sales journal to the shipping documents.
   	d.	bill of lading to the supporting customer order and sales order.

2 points

QUESTION 18

1. The auditor is testing the controls over recording sales returns and allowances. The auditor finds that due to inadequate documentation and approvals, the control is deemed ineffective. What is the consequence of this finding ?

   	a.	sampling is not appropriate.
   	b.	all sales returns must be confirmed with the customer.
   	c.	all sales returns must be traced to supporting documentation.
   	d.	a larger sample may be required to verify cutoff.