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substantive testing

This topic has 3 replies, 2 voices, and was last updated 4 years ago by Kim Smith.

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October 14, 2021 at 10:46 am #637660
abokor
Participant
- Topics: 82
- Replies: 114
Hello, kim
hope u are doing god.
Subtractive testing over completeness of the purchases: Inspect the unmatched GRN file and seek explanations for any old unmatched items and trace these to the year-end accruals listing.
sir, how does tracing unmatched GRN to accruals listing help test completeness of purchases.
thanks in advance
October 14, 2021 at 1:33 pm #637670
Kim Smith
Keymaster
- Topics: 138
- Replies: 8443
I think the short answer to your question is because the double entry to record the accrual is:
Dr Purchases
Cr Goods-received-not-invoiced accrual
To confirm completeness of recording credit entries must necessarily confirm completeness of recording corresponding debits (unless trial balance doesn’t balance! which is why it is so important as a control mechanism).
October 14, 2021 at 1:39 pm #637671
abokor
Participant
- Topics: 82
- Replies: 114
Very clear, thank u very much Kim
October 14, 2021 at 1:59 pm #637672
Kim Smith
Keymaster
- Topics: 138
- Replies: 8443
You’re very welcome!
By the way, advance warning, I am away from tomorrow for a long weekend, wedding celebration with little/no internet access, so I may not be able to reply to posts after today until Tuesday.
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