The auditor would like to design a test of control to test that unit selling prices are obtained from the price list master file of approved prices.Which of the following typical tests of controls would be suitable?
A)Compare prices used on sales invoices to the authorized customer purchase order.
B)Review changes to the price file throughout the year for proper authorizations and trace prices to copies of sales invoices.
C)Use analytical review to compare total sales last year to total sales this year.
D)Discuss the process used to authorize sales prices with the sales manager and the controller.

Question

Quizplus · Accepted Answer

Option A compares prices on sales invoices to customer purchase order, which is not directly related to the control objective of prices being obtained from the authorized price list. Option C compares sales from previous years, which is an analytical review procedure and not a test of control to verify whether unit selling prices are obtained from the price list. Option D is a control evaluation procedure and not a test of control. Option B is the most relevant as it tests whether the changes to the approved price list had proper authorization and whether those prices were actually used in sales transactions by tracing them to copies of sales invoices. Hence, B is the best choice for testing the control.

The Auditor Would Like to Design a Test of Control