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Which of the following substantive procedures provide evidence over occurrence assertion for revenue?
a)Select a sample of GDNs and agree to invoices in the sales day book
b)Select a sample of invoices from the sales day book and agree to GDNsCorrect answer is b but please can you explain? Also doesn’t both of these procedures sounds same?
Would it be a valid procedure for occurrence assertion for revenue that “Compare invoices with GDNs to verify completeness.”
Revenue occurs because a customer buys goods. A sign of that is that the customer ordered goods and these were despatched.
(a) You would,expect every GDN to produce an invoice, but this would not detect false invoices.
(b) if there were false invoices posted to sales and the receivables ledger, this could detect they were false because there is no GDN.
Verifying occurrence is not the same as verifying completeness.
Sorry Sir I mean to ask that would it be a valid procedure for completeness assertion for revenue that “Compare invoices with GDNs to verify completeness.”
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