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arushi_13
Major Contributor

Joined: 09 Feb 2008
Online Status: Offline
Posts: 1235

Posted: 24 Jun 2008 at 18:36 \| IP Logged

I had a few Qs on Directional Testing. I do not have the answers with me as I got it from a website.Please could someone review them and advise if your answers match mine. Thanks.

1.    Tracing bills of lading to sales invoices provides evidence that
a)    Shipments to customers were invoiced.
b)    Shipments to customers were recorded as sales.
c)    Recorded sales were shipped.
d)    Invoiced sales were shipped.

Answer:b

2.    Tracing copies of sales invoices to shipping documents will provide evidence that all
a)    Shipments to customers were recorded as receivables.
b)    Billed sales were shipped.
c)    Debits to the subsidiary A/R ledger are for sales shipped.
d)    Shipments to customers were billed.

Answer:c

3.    An auditor selects a sample from the file of shipping documents to determine whether invoices were prepared. This test is performed to satisfy the audit objective of
a)    Accuracy.    c) Control.
b)    Completeness.    d) Existence.

Answer:b

4.    To determine whether accounts payable are complete, an auditor performs a test to verify that all merchandise received is recorded. The population of documents for this test consists of all
a)    Vendorā€™s invoices.        c) Receiving reports.
b)    Purchase orders.        d) Canceled checks.

Answer:a

5.    An auditor performs a test to determine whether all merchandise for which the client was billed was received. The population for this test consists of all
a)    Merchandise received.        c) Canceled checks.
b)    Vendorsā€™ invoices.        d) Receiving reports.

Answer: d.

Thanks once again for your help.

agtitan06
Major Contributor

Joined: 20 Jan 2008
Location: United States
Online Status: Offline
Posts: 113

Posted: 25 Jun 2008 at 00:26 \| IP Logged

I agree with all your answers except for 2, 4, and 5.

I believe the answer to 2 is B.
Tracing sales invoices to shipping documents is simply checking that all billed sales were shipped.

I believe the answer to 4 is C.
Since you're testing completeness of A/P, you'll want all receiving reports, then you make sure the received items were recorded in A/P.

I believe the answer to 5 is C.
Since you want to make sure the company received everything they were billed for, you'll want to look at all the bills (Vendor Invoices), then you will find the receiving report that corresponds to that vendor invoice.

__________________
Texas - Used Becker
BEC - 84 (Taken 1/29/08, Received 2/19/08)
REG - 92 (Taken 2/29/08, Received 3/17/08)
AUD - 94 (Taken 4/4/08, Received 6/23/08)
FAR - 83 (Taken 5/9/08, Received 5/19/08)

arushi_13
Major Contributor

Joined: 09 Feb 2008
Online Status: Offline
Posts: 1235

Posted: 25 Jun 2008 at 20:10 \| IP Logged

Thanks a lot agtitan06 for your help.
I really appreciate it.

I saw u got 94 in AUD which is an awesome score. Please could u advise as to what books u referred to. Any other advise I will really really appreciate it.

Thanks again.

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