- This topic has 1 reply, 2 voices, and was last updated 2 months ago by
.
- Posts
AUDIT RISK
The payables ledger clerk has carried out supplier statement reconciliations during the year and for a number of suppliers, the supplier statements have shown a balance owing by the company which is higher than the balance on the list of individual supplier balances. These differences have been included as reconciling items on the supplier statement reconciliations, but no further investigation has been carried out on these differences.There is a risk that cut-off is incorrect, resulting in trade payables, cost of sales and expenses being
understated.I don’t understand how they have arrived at the conclusion of “expenses” also being understated…
We know that Dr Purchases Cr Payables, so I get how payables and cos are understated…
How is expenses understated?
- You must be logged in to reply to this topic.