What is the observation test method?


Another common technique would be the observation test method. This is where the auditor would come into your place of business, spend a day or maybe over several days and they would observe what’s going on at your business. They would observe the volume of sales, the volume of customers, the types of sales that are occurring at your place of business. And then once they gather that information they could then compare it to what they see in your records to determine if your records seem to be complete and accurate.

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