Final answer:
The review of the open sales order file is a truthful method to verify the completeness of recorded sales in financial statements. It is a common approach in auditing to ensure accuracy and completeness in financial reporting of sales transactions.
Step-by-step explanation:
The statement that the open (or pending) sales order file can be reviewed for evidence of the completeness of recorded sales is true. In auditing and accounting, reviewing the open sales order file is a method used to check for unrecorded or missing sales transactions at the end of an accounting period. This helps ensure that the recorded sales revenue in the financial statements is complete and accurate, a practice that is integral to the reliability of financial reporting.
How to use the open sales order file in sales audit:
Identify the open sales orders at the end of the reporting period.
Match these open orders with subsequent deliveries or invoices to confirm that they are eventually recognized as sales.
Investigate any discrepancies or orders that have not been converted to sales to determine if there are any sales that were not recorded in the period in which they should be.