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Q2)
I did not understand why one tracing method is effective while the other is not. Please elaborate generously.
Thankyou
Please see first this post https://opentuition.com/topic/audit-procedures-assertions-2
More succinctly …
To test for existence of an asset (from what is recorded in the FS to the physical asset) is a test for overstatement
To test for completeness of an asset/additions is a test for understatement – i.e. what hasn’t been recorded/has been omitted
A test cannot be efficient in meeting its objective if it is in the “wrong direction”.
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