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

Mark says: I really dont 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 dont get it either. I hope theres nothing on the test about it.

You respond: I really dont want to take that chance. Professor Smart seems to enjoy asking us hard questions. I think we better figure it out and be prepared. Id 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?