Management assertions are representations made implicitly or explicitly by management in financial statements.  For example, by stating an amount for sales, management asserts (among other things) that all sales that occurred were recorded (ie, completeness) and that recorded sales occurred (ie, occurrence).  If sales are overstated, it may be a violation of the occurrence assertion.  If sales are understated, it may be a violation of the completeness assertion.

To detect a possible understatement of sales, an auditor can use a test of details for the completeness assertion: tracing supporting documentation to accounting records.  Shipping documents generally indicate a sale.  Therefore, to test completeness of sales, the auditor may start with shipping documents and verify that for each item shipped there is a corresponding invoice indicating that the sale was recorded.

(Choice A)  Tracing (vouching) from sales invoices to shipping documents would provide evidence that all recorded sales actually shipped, supporting the occurrence assertion.

(Choices B and D)  Payments are received for many reasons (eg, interest payments) other than sales.  Moreover, payments for sales may occur before or after the sale is recorded (ie, prepaid or on account).  Therefore, the presence or absence of a payment in the cash receipts journal is not b evidence that a sale did or did not occur.

Note:  Because the CPA exam sometimes uses "trace" to mean "vouch ," it is important to understand the direction of testing, not to memorize the terms.

Things to remember: Tracing transactions from documents indicating a sale (eg, shipping documents) to records indicating the recording of a sale (eg, invoices) provides evidence that sales are not understated (ie, completeness).