Your Ask Joey ™ Answer

Is Tracing Always The Default Test for Management’s Completeness Assertion?

When I say completeness you say what?! 

Trac… Oof! We actually wouldn’t ideally be tracing when testing for management’s completeness assertion for account payable balances. Tracing is a better test applied when testing for management’s overstatement of something in their financial statements (e.g., revenue, cash etc.) 

When testing for completeness on accounts payable, while technically “agreeing the payable listing to the general ledger may test for the completeness assertion, the better test would be for the auditor to perform a search for unrecorded liabilities!

This is an exam trick that they loooove to test! Don’t memorize it, see it! Universal CPA Review wants to give you that “Oh, now I see it!” moment.

Back To All Questions

You might also be interested in...

  • Three Reasons to Become an Accountant

    If you’re someone who is intrigued by numbers, enjoys problem-solving and wants to help others, then accounting might be the perfect career for you. While some people may be put off by its unalluring reputation, accounting is an excellent career choice that has many benefits. In this article, we look at three of the reasons...

  • Qualified Retirement Planning: Tax Advantages & Disadvantages

    Home Advantages and Disadvantages of Tax-Free and Deferred-Tax Retirement Plans What are “qualified retirement plans” and how can they be effective for tax planning? Well, there are plenty of tax savings advantages to individuals contributing to tax-free retirement accounts, as well as tax-deferred retirement accounts. However, this doesn’t necessarily mean that there are no disadvantages...

  • CPA Evolution Survival Guide

    Download Your eBook by selecting the download icon in the top right-hand corner