When using confirmations to provide evidence about the completeness assertion for accounts payable, the appropriate population most likely would be: Show
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Auditing MCQ Auditing When using confirmations to provide evidence about the completeness assertion for accounts payable, the appropriate population most likely would be When using confirmations to provide evidence about the completeness assertion for accounts payable, the appropriate population most likely would beWhen using confirmations to provide evidence about the completeness assertion for accounts payable, the appropriate population most likely would be a. Vendors with whom the entity has previously done business Answer: a. Vendors with whom the entity has previously done business Learn More :Following are audit procedures that are normally conducted in the purchasing process and related accounts. 1. Test a sample of purchase requisitions for proper authorization. 2. Test transactions around year-end to determine if they are recorded in the proper period. 3. Review results of confirmation of selected accounts payable. 4. Compare payables turnover to previous years' data. 5. Obtain selected vendors' statements and reconcile to vendor accounts. 6. Compare purchase returns and allowances as a percentage of revenue or cost of sales to industry data. Required: Identify whether the tests listed above are substantive analytical procedures, tests of details of transactions, or tests of details of account balances. Home » Test Prep » CPA Auditing and Attestation » When using confirmations to provide evidence about the completeness assertion for accounts payable, the appropriate population most likely would be: When using confirmations to provide evidence about the completeness assertion for accounts payable, the appropriate population most likely would
be: How do you test the completeness of accounts payable?The primary test to confirm the completeness assertion for accounts payable and other liabilities is to perform a “search for unrecorded liabilities”. Basically, the audit team obtains a listing of all cash disbursements made for a period of time after year-end. What assertions do confirmations test?A positive confirmation from the customer confirms the existence assertion in the financial statements. Accounts receivable confirmations are generally more valuable in proving existence assertions than other standard assertions, such as completeness, according to the AICPA. What is the purpose of testing for completeness in accounts payable?Testing for completeness means checking that the company records show all the accounts payable and state the amounts owed accurately; understating or omitting the amounts owed will distort the balance sheet and make a company look more profitable than it is. What are the relevant assertions for accounts payable?The primary relevant accounts payable and expense assertions are:. Existence.. Completeness.. Cutoff.. Occurrence.. When confirming accounts payable emphasis should be put on what kind of accounts?When confirming accounts payable, emphasis should be put on what kind of accounts? Accounts with small or zero balances. What is the primary audit procedure the auditor performs to test the completeness of accounts payable?The primary test to confirm the completeness assertion for accounts payable and other liabilities is to perform a “search for unrecorded liabilities”. Basically, the audit team obtains a listing of all cash disbursements made for a period of time after year-end. What is the purpose of a completeness test?Completeness Testing Audit procedures can test to see if any transactions are missing from the accounting records. For example, the client's bank statements could be perused to see if any payments to suppliers were not recorded in the books, or if cash receipts from customers were not recorded. How do you ensure completeness of accounts payable?Make sure there are cash disbursements to match any reduction in accounts payable, and every check paying off a vendor has a corresponding account. If there's a check that can't be matched to an account, it may mean the account is not on the books. When using the confirmations to provide evidence about the completeness assertion for accounts payable the appropriate populations most likely is?For example, when using confirmations to provide evidence about the completeness assertion for accounts payable, the appropriate population might be a list of vendors rather than the amounts recorded in the accounts payable subsidiary ledger.
How do you ensure completeness of accounts payable?The primary test to confirm the completeness assertion for accounts payable and other liabilities is to perform a “search for unrecorded liabilities”. Basically, the audit team obtains a listing of all cash disbursements made for a period of time after year-end.
Why do confirmations not typically provide reliable evidence about the completeness assertion?The confirmation of customers' accounts receivable rarely provides reliable evidence about the completeness assertion because: customers may not be inclined to report understatement errors in their accounts.
What is the purpose of testing for completeness in accounts payable?Testing for completeness means checking that the company records show all the accounts payable and state the amounts owed accurately; understating or omitting the amounts owed will distort the balance sheet and make a company look more profitable than it is.
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When using confirmations to provide evidence about the completeness assertion for accounts payable
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