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In bpp mock test there is one question on payables:
The audit manager asked you to review the full list of trade payables and select balances on which supplier statement reconcilatins will be performed.Suppliers with material balance at year end- Include or Exclude (answer is include)
Suppliers which have high volume of business -Include or exclude(Answer is Include)
Major supplier with nil balance at year end Include or exude (answer is include)
Major supplier where the statement agrees to the ledger-Exclude(answer is exclude)I dont get it, on what basis they have given the answers it not even related with question.
A payables circularisation is a request for suppliers’ statements. If the client already has and are in agreement, these would most likely not need to be included. Because test is primarily for completeness (understatement) you would include suppliers with nil balances per the client’s ledger and major suppliers selected from the reciprocal population of purchases.
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