Chapter 14 Exam 4

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establish the __________ of recorded a/p

completeness

search for unrecorded accounts payable tests for what objectives

completeness and cutoff

direct communication with vendors or suppliers to determine the amount of an account payable. represents high-quality evidence because it is a document created outside the client organization and transmitted directly to the auditors

confirmation

a transfer of goods from the owner to another person who acts as the sales agent of the owner

consignment

verify the __________ of transactions affecting a/p

cutoff

acquisition of merchandise on credit receipt of services such as advertising repairs etc

examples of accounts payable

substantiate the ________ of a/p and the clients ________ to pay these liabilities and establish the _________ of purchase transactions

existence, obligation, occurrence

when searching for unrecorded a/p the auditors will examine transactions that were recorded

following year end

unmatched invoices and unbilled receiving reports vouchers payable entered in the voucher register subsequent to balance sheet invoices received by the client after the balance sheet date

potential sources of unrecorded payables

determine that the ___________________________________ of a/p are appropriate

presentation and disclosure

the time extending from the balance sheet date to the date of the auditors report

subsequent period

other examples of unrecorded a/p would be

unrecorded liabilities related to customer deposits, obligation for securities purchased but not settled at balance sheet, unbilled contractor for building, unpaid attorney fees

establish the proper ____________ of a/p and the ___________ of purchase transactions

valuation

a journal used in a voucher system to record liabilities requiring cash payment in the near future. every liability recorded in this corresponds to a voucher authorizing future payment

voucher register

lead schedule for a/p trial balances of various types of a/p confirmation requests listing of unrecorded a/p

working papers

when is the audit work for payables performed

year end financial reporting

short term obligations arising from purchase of goods and services in ordinary course of business

account payable

a comparison of cash payment occurring after the balance sheet date with the ______ _____ ______ _______ is generally the most effective means of disclosing unrecorded a/p

accounts payable trial balance

__________ ____________ represent accounting estimates made by the client of amounts that will subsequently become payable

accrued liabilities

accumulate over time and management must make accounting estimate at year end

accrued liabilities

interest payable, accrued property taxes, accreued payrolls and payroll taxes, income taxes payable, and amounts accrued under service guarantees

accrued liabilities

obligations payable sometime during the succedding period for services or privileges received before the balance sheet date

accrued liabilities

sometimes called accrued expenses examples salaries, interest, and rent

accrued liabilities

subsidiary records not in agreement with general ledger receiving reports and vouchers used haphazardly purchase transactions not recorded until payment is made many accounts payable long past due risks such as these indicate the need for additional substantive procedures

indications of risks of misstatement

objective for the audit of a/p use the understanding of the client and its environment to consider __________ ______, including fraud risks related to a/p

inherent risks

what obligations are not included in accounts payable; they are included as bonds, notes, etc

interest-bearing

objective for the audit of a/p obtain an understanding of __________ ______ over a/p

internal control

if management does not make such an estimate to accrued liabilities at year end ___ __________ will occur since the related transactions may have occurred months ago

no entry

exaggerates the financial strength of company conceals fraud as effectively as overstatement of assets accompanied by understatement of expenses and overstatement of net income

possibility of understatement or omission of liabilities

primary concern in audit of liabilities

possibility of understatement or omission of liabilities


संबंधित स्टडी सेट्स

English Plus 1 second edition Unit 8

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