Which set describes the network of information that can be used as an audit trail?

Which set describes the network of information that can be used as an audit trail?

• A. Adjusted trial balance, ledgers, and journals
• B. Adjusted trial balance, closing entries, and ledgers
• C. Documents, journals, and ledgers
• D. Journals, ledgers, and special journals or subsidiary ledgers

Answer: (C)

An audit trail is the sequence of evidence that lets auditors follow a transaction from its origin to its impact on the financial records. The most complete network for this trail includes the source documents that capture the event, the journals where the transaction is initially recorded, and the ledgers where those records are posted and summarized. This progression—documents, then journals, then ledgers—provides traceability and accountability, enabling verification and detection of misstatements. Other options leave out one of these essential elements or replace them with later outputs (like an adjusted trial balance or closing entries) that do not by themselves provide the original evidence or the full posting chain. Special journals or subsidiary ledgers are part of the ledger system, but without the original documents, the trail is incomplete.

An audit trail is the sequence of evidence that lets auditors follow a transaction from its origin to its impact on the financial records. The most complete network for this trail includes the source documents that capture the event, the journals where the transaction is initially recorded, and the ledgers where those records are posted and summarized. This progression—documents, then journals, then ledgers—provides traceability and accountability, enabling verification and detection of misstatements. Other options leave out one of these essential elements or replace them with later outputs (like an adjusted trial balance or closing entries) that do not by themselves provide the original evidence or the full posting chain. Special journals or subsidiary ledgers are part of the ledger system, but without the original documents, the trail is incomplete.