[Sal]

3. Compare management’s cash budget with the year-end balance.

[-] completeness (correct)
[x] Accuracy (Incorrect)
[] Valuation & Allocation
[] Existence
[] Cut off
[] Rights & Obligations
[] Occurence
for some reason I just can’t get completeness down or when I think I have it down, it just turns out to be something else you will see below. I thought comparing expected vs actual will give us an estimate what the ending amounts should be therefore it would be related to Accuracy… but it’s completeness. every time I look at MCQ dealing with completeness I just wanna throw in the towel and just run away…errrr…. can anyone help ? thanks you.

4. Vouch a sample of recorded cash receipts to accounts receivable and customer orders.
options: [x] completeness (incorrect)
[] Accuracy
[] Valuation & Allocation
[] Existence
[] Cut off
[] Rights & Obligations
[-] Occurence (Correct)
could some one explain me how this would relate to occurrence? I thought Completeness refers to transactions being recorded for proper amount and being complete in books and source documents so I picked that. can you explain .. much appreciated

- SAL

[HT415]

Think of Completeness this way…

“All transactions that should have been recorded have been recorded”

So by testing Completeness we are basically saying in order for us to deem this account as being “complete”, it should contain all appropriate transactions that will lead to the ending balance in that account. It's very easy to just want to throw Accuracy in here as well, but when you get to understand the differences in how these two assertions are tested, it'll make a lot more sense.

Accuracy focuses on the amounts included in those transactions and when we test it, we are testing those amounts (values) specifically.

4. Vouch a sample of recorded cash receipts to accounts receivable and customer orders.

By vouching a sample of cash receipts to the A/R detail and Customer Orders, we are essentially saying the A/R detail and Customer Orders are “vouching” or validating the “occurrence” of this transaction. We are providing proof of the transaction and that there is an origin from which this transaction began, and we are able to vouch it to the very beginning, which is the Customer placing an order for the product.

It's not Completeness in this case since Completeness is again testing that all transactions that should have been recorded were actually recorded. You most typically see Completeness being tested with Liability accounts (AP for ex.) where we are testing for understatement. Conceptually, if you can understand why a “SURL”, Search for Unrecorded Liabilities, is performed, then that will greatly enhance your understanding of the Completeness assertion.

We search for unrecorded liabilities to ensure the client is not intentionally/unintentionally understating their liabilities, that is, not including liability transactions that should have been included. By doing so, we are assessing the “Completeness” of the Liability, in other words, we are asking this question
– Have all transactions that relate to this Liability (AP) been recorded? If so, as auditors we feel comfortable in stating that Accounts Payable appears complete.

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BEC - 77
FAR - 75
REG - 82

Licensed CPA practicing in California.

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[Sal]

@HT415 thanks! for such a detailed response the light bulb has turn on 🙂 much appreciated.

- SAL

[Madhav]

Completeness is Source to Book. Has all transactions that occurred are recorded in the book? So it is basically to prevent hiding of records either Gain or loss. Existence is opposite. Has transactions occurred that is already recorded in the book? It is basically to prove that transaction occurred that company is referring to the books. Hope that helps.

AUD - 76
BEC - 75
FAR - 76
REG - 77

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[Author]

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