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How to test for completeness of purchases or expenses?

The completeness assertion is critical for purchases/expenses as there is a risk that the company understates expenses in the financial statements so that profit can be overstated.

To test for completeness, the audit team should sample purchase orders, receiving reports, and invoices and trace them to the purchase journal (the purchase journal should reconcile with expenses in the financial statement).

If all of the items sampled are properly included in the purchase journal, then the audit team can conclude that the financial states are complete or include all purchases.


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