Question

An auditor selects a sample of items recorded and traces them back (vouches) to the supporting documentation. This is an example of which of the following?

a. Directional testing for existence.
b. Directional testing for completeness.
c. Direct test for valuation.
d. Direct testing for rights.

Answer 1

The auditor selecting a sample of items recorded and tracing them back to supporting documentation is an example of direct testing for existence.

Step-by-step explanation:

The auditor selecting a sample of items recorded and tracing them back to supporting documentation is an example of direct testing for existence. This process is used to confirm that the items recorded actually exist and can be supported by relevant documentation.

For example, if an auditor selects a sample of sales transactions recorded in the company's books, they may trace these transactions back to the original sales invoices to ensure that the sales actually occurred.

This type of testing helps verify the accuracy and reliability of the recorded transactions and supports the overall audit process.