Auditing Chapter 14

Steps to Verify Accounts Payable

1) Consider inherent risks 2) Obtain understanding of internal controls 3) assess risks of material misstatement 4)

Objectives in audit of accounts payable

1) Use understanding of the client and its environment to consider inherent risks 2) Obtain an understanding of internal control over accounts payable 3) Assess the risks of material misstatement and design tests of controls and substantive procedures

Vouchers

A document authorizing a cash disbursement

Vendor's statement

A monthly statement prepared by a supplier showing the beginning balance, charges during month for goods or services, amounts collected, and ending balance

Primary objective in auditing accounts payables

Completeness

Accounts Payable

Short-term obligations arising from the purchase of goods and services in the ordinary course of business

Accrued Liabilities

Short-term obligations for services of a continuing nature that accumulate over time