Question

To determine whether the system of internal control operated effectively to minimize errors of failure to invoice a shipment, the auditor would select a sample of transactions from the population represented by the ____________.

1) customer order file.
2) bills of lading file.
3) open invoice file.
4) sales invoice file.

Answer 1

An auditor would select a sample from the bills of lading file to determine if every shipment was invoiced, ensuring the internal control system minimizes errors.

Step-by-step explanation:

To determine whether the system of internal control operated effectively to minimize errors of failure to invoice a shipment, the auditor would select a sample of transactions from the population represented by the bills of lading file. The bills of lading file most directly reflects the shipments that have been made and thus would include evidence of whether shipments were invoiced. Selecting a sample from this file and comparing it with sales invoices would help the auditor to check if every shipment resulted in an invoice, revealing the efficacy of the control system.