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Which of the following audit procedures should be performed in relation to the balance with Lily Co to determine if the payables balance is understated?
A. Inspect the GRN to determine when the goods were received
?for me this is to test cut off?
B. Inspect the PO to confirm it is dated before the year end
?for me PO’s date not related with year end balances?
C. Review post year end cashbook for evidence of payment of invoice
?for me this is nothing to do with completeness?
D. Send a confirmation request to Lily Co to confirm the outstanding balance.The standard answer is A.
Based on my understanding, the question asking about payables understatement, it is related to assertion – completeness.
My answer is D. Based on my understanding sending confirmation to supplier to confirm the balances is to test the completeness and accuracy. But the answer is A. Can sir please explain why?
Thank you so much?
Please ask again if this doesn’t answer your question https://opentuition.com/topic/audit-procedure-19
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