Chapter 14

Ordinarily, the most significant assertion relating to accounts payable is :

Completeness

In an audit, the valuation of year-end accounts payable is most likely addressed by:

Confirmation

An audit of the balance in the accounts payable account is ordinarily not designed to :

Detect accounts payable that are substantially past due

Which of the following is the best audit procedures for determining the existence of unrecorded liabilities?

Examine selected cash disbursements in the period subsequent to year-end.

In performing a test of controls, the auditors vouch a sample of entires in the purchases journal to the supporting documents. Which assertion would this test of controls most likely test?

Existence

To determine that each voucher is submitted and paid only once, when a payment is approved, supporting documents should be canceled by the :

Individual who signs the checks

For effective internal control, the accounts payable department should compare the information on each vendor's invoice with the :

Receiving report and the purchase order.

A client is erroneously recorded a large purchase twice. Which of the following internal control measures would be most likely to detect this error in a timely and efficient manner?

Reconciling vendors' monthly statement with subsidiary payable ledger accounts.

Which of the following procedures is least likely to be completed before the balance sheet date?

Search for unrecorded liabilities

Auditor confirmation of accounts payable balances at the balance sheet date may be unnecessary because :

There is likely to be other reliable external evidence available to support the balances

When confirming the accounts payable , the approach is most likely to be one of :

selecting the accounts of companies with whom the client has perviously done the most business plus a sample of other accounts.

The least likely approach in auditing managements estimate relating to an accrued liability is to

send confirmations relating to the estimate