You are very short on time and another audit staff accountant states that both v

Question

You are very short on time and another audit staff accountant states that both vouching and tracing tests are not necessary because in both types of tests you will be testing the same Accounts Receivable balance. Even though we vouch from the financials and we trace to them.

When testing for existence of something recorded in the financial statements we vouch and when testing for completeness to see if something is recorded in the financial statements we trace. Do you agree that it doesnt matter if we vouch or trace the Accounts Receivable balance? Why or why not?

Explanation / Answer

Both vouching and tracing tests are necessary because while auditing the financial statement accounts receivable needs to be reconcilled completely with the Financial Statement - The Ledger balance of Accounts reeivable in Financial Statement should match with the sub ledger of Receivable with all Receivable from each customer tallying and adding back to the sum of the receivables in Financial Statement. Accounts receivable is a Balance Sheet Item and an asset with extreme importance. vouching and tracing tests are necessary their is a possiblity of the non posting of few records to the Financial Statement - As financial statements are made of balances coming from sub ledgers and ledgers s any thing traced back will be matched unless any adjustment but if something is missed in Statement by Error will not be traced unless we do a vouching and tracing tests

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