tlindsey31
offlineMember
The example of the house that Becker uses make more sence to me.
-------------------- Vouch down for existence (Looking for OVERstatement)
/ \
/ \ General Ledger
/ \
I _ I supporting Documents
I I I I Trace up for completeness (Looking for UNDERstatement)
Since your OVER the house you are looking for OVERstatements of Assets and Revenue
Since your UNDER the house your looking for UNDERstatements of liabilities and expenses
Jeff - another71.com
offlineadmin
TC ... VE
T before V
C before E
(get ninja) :)
jenuno01
offlineMember
Becker is right.
Becker's little house method is cute...but I learned a better way to logically remember this in college.
TRACING: think about when you were 6 years old and you did TRACING exercises in your coloring book... when you trace, you start at the BEGINNING and TRACE to the end right? Ok so, how does a transaction begin? It begins in paper, or documentation...and where does it end? It ends in the GL system... so you are tracing from Support to System. Why are you tracing the support to the GL? Because you want to make sure that every transaction got recorded to the GL--in other words, you want to make sure the GL is COMPLETE
Vouching: If you understand Tracing ...just think the opposite way. You Vouch from the GL system to support...why? because you want to make sure that every transaction in the GL system actually EXISTS... in other words, yo want to ensure transactions are legimate and appropriate documentation/evidence exists.
goodluck2everyone
offlineMember
its not a matter of memorizing or understanding the concept, I was just getting two difference answers on what vouching was
it makes sense that it is for "existence", that's why I was thrown off by that question on cpareviewforfree. Must have been a typo? thanks everyone for your answer
@jeff
I'll consider purchasing ninja. I bought the ninja notes for reg and it was a bit on the light side for me (not enough details)
Jeff - another71.com
offlineadmin
I understand - it's intended as a supplement/review...it's not a full course (although someone scored an 81 this window using only FAR NINJA + Wiley, which was good to hear). I tried to keep it as detailed as possible but keep it light enough to review several times the week of your exam.
goodluck2everyone
offlineMember
this is what I'm talking about. Check out this question:
An auditor select 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
B) Existence
C) Completeness
D) Control
I know that this is a form of vouching and in my book is says that vouching (going backwards) is to gather evidence of EXISTENCE so that's what I put. Here's the answer I got:
"Answer is C. The completeness assertion is concern with whether all transactions are recorded. In this instance, the requirement is to identify the financial assertion related to the auditor's back-tracing (vouching) shipping documents to their invoices. Vouching from the shipping document (execution of an event) to the shipping invoices (event transaction approval) helps to determine whether the shipping document is complete. "
what the hell??
hopefulcpa28
offlineMember
That's exactly what I was thinking when I was doing these questions and I was so mad b/c answers weren't consistent with the way book explained (or at least the way I understood).
But the answer is right, and it make sense.
If you go from source document to the next step: It's completeness.
So like going from 1 to 2...completeness,
Going from 2 to 1, vouching. For example, in this questions: If they were going from invoices to shipping documents, it would have been existence.
This is why understanding the flow of transaction is really important. What comes first? Shipping documents or Invoices? Shipping documents THEN invoices.
So going from source to output is completeness
Going from output to accounting records is vouching.
Hope that helps. I can't stand vouching and tracing and makes no sense, but keep reading it multiple times and doing MCQs, you'll get there.
hopefulcpa28
offlineMember
Haha yeah, I was confused over that as well....I have no idea why that is. I learned to overlooked that part and basically understood whether they were going from accounting records to report or the other way around. Based on that, I would choose whether it was vouching or tracing.
nuclear3579
offlineMember
Was this questioned released?
Anytime you go from the the 'lower' supporting documents to a higher level (invoices), you're going 'up' the house and it's completeness. Sometimes they use "Vouch" to indicate directional testing in general, and they're not indicating a downward direction. In this question, it's very confusing and they probably threw it out because of that.
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