Question

When comparing prices and terms on a sample of sales invoices with the authorized price list and terms of trade, the auditor is testing the ________ assertion.

A) cutoff
B) authorization and accuracy
C) occurrence
D) completeness

Answer 1

The auditor is testing the authorization and accuracy assertion by comparing sales invoices to the authorized price list and terms of trade to ensure transactions are correctly authorized and recorded.Answer is option b.

Step-by-step explanation:

When comparing prices and terms on a sample of sales invoices with the authorized price list and terms of trade, the auditor is testing the authorization and accuracy assertion.

This procedure ensures that the transactions have been properly authorized according to the company's pricing policies and that the amounts recorded are accurate in relation to the price list and terms of trade. This type of testing helps auditors to determine if there are any deviations or misstatements in the pricing of the sales transactions within the financial records.