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Completeness assertion- testing understatment

This topic has 1 reply, 2 voices, and was last updated 1 year ago by Kim Smith.

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August 26, 2021 at 5:24 am #632953
Noah098
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maam to test understatement we need to check the completeness assertion, which involves tracing a sample form OUTSIDE the system through to its inclusion in the system.
however as far testing completeness of sales/trade receivables is concerned we check the GDNs and agree it to sales invoice through to its inclusion in the sales day book/TRs ledger.
now these GDNs are not from outside the entity, they are prepared by the entity itself, so then how is it valid?
August 26, 2021 at 8:01 am #632989
Kim Smith
Keymaster
- Topics: 100
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Outside the ACCOUNTING records – not outside the entity.
To answer the Q “is revenue complete?” you ask “has every goods despatch been invoiced?”
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