Q.What documents should an auditor examine while vouching Cash Sales? State any two red flags that suggest suppressed cash sales.

Cash sales are vouched by working FORWARD from the memo to the book, precisely because suppression means an entry is missing, not wrong.

Documents to examine for Cash Sales:

• The cash memos/sale bills actually issued to customers.
• The cash register or till roll, where one is maintained.
• The daily cash summary prepared by the cashier.
• The bank pay-in-slip, to confirm the cash collected was actually banked.

Procedure: the auditor should work FORWARD from the cash memo to the Cash Book entry (not only backward from the book to the memo), specifically because a SUPPRESSED sale simply never gets entered in the books at all — checking only from the books outward would never catch a sale that was never recorded in the first place.

Red flags suggesting suppressed cash sales (any two, illustrative):

1. Gaps in consecutively numbered cash memos — a missing memo number, with no cancelled memo on file to account for it, suggests a sale was made and the proceeds pocketed without any record being created. …

Students sometimes only mention checking the Cash Book itself, missing the key point that vouching cash sales specifically requires working FORWARD from the source document (memo) to the book, …