Final answer:
Tracing from receiving reports to vendor's invoices and acquisitions journal is a routine audit procedure verifying the completeness of transaction recording. It involves ensuring all received goods are invoiced and recorded accurately in the financial records, helping maintain accurate and reliable financial statements.
Step-by-step explanation:
The process of tracing from receiving reports to the vendor's invoices and the entries in the acquisitions journal is a method used in accounting to ensure that all goods received have been properly recorded and that the associated expenses are accurately reflected in the books. This step is part of the internal control procedures for the completeness assertion, meaning it ensures that all transactions that should have been recorded are indeed recorded.
When tracing for completeness, you begin with the receiving reports, which are documents that record the receipt of goods from suppliers. You then trace those goods to the corresponding vendor's invoices to verify that the vendor billed the company for the correct items and amounts. Finally, you check that these invoices have been correctly entered into the acquisitions journal, which records all purchases made by the company. This tracing process provides support for the financial records, reinforcing the accuracy of the recorded transactions.