Question

In case of vouching, the auditor is least likely to examine authorization by appropriate authority in case of _________.

• A. Bad bads written off
• B. Sales return
• C. Purchase return
• D. Discount allowed to customers as per organizational policy

Answer 1

Answer: (D)

Discount allowed to customers as per organizational policy

Organization may have a policy of allowing discount to the customer. The discount policy is must always be approved by the management and an appropriate person is only allowed to approve the discount.

Hence while vouching the discount, auditor must ensure that the discount is allowed as per the approved policy.