If the internal controls for recording sales returns and allowances are evaluated as ineffective,
A)a larger sample is needed to verify cutoff.
B)sampling is not appropriate.
C)all sales returns must be traced to supporting documentation.
D)all sales returns must be confirmed with the customer.

Question

Quizplus · Accepted Answer

When internal controls are evaluated as ineffective, auditors typically increase the sample size for testing to gain a higher level of assurance, which includes verifying the cutoff of transactions like sales returns and allowances.

If the Internal Controls for Recording Sales Returns and Allowances