Ping and Pong are assigned to perform the audit of Paddle Company. During the audit, it was discovered that the amount of sales reported on Paddle’s income statement was understated because one week’s sales transactions were not recorded due to a computer glitch. Ping claims that this problem represents a violation of the management assertion regarding existence, because the reported account balance was not real. Pong argues that the completeness assertion was violated, because relevant data was omitted from the records. Which auditor is correct? Explain your answer
Answer to relevant QuestionsIdentify whether audit tests are used to evaluate internal access controls (I), external access controls (E), or both (B).Explain why it is customary to complete the testing of general controls before testing application controls. Explain why continuous auditing is growing in popularity. Identify and describe a computer-assisted audit technique useful for continuous auditing. Distinguish between a pick list and a packing slip.Describe how a POS system could be useful to a company’s marketing managers. How could it be useful to production managers?
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