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1. Select a sample of GRNs before the year end and after the year end and follow through to inclusion of the liability in the correct period’s payables balance to ensure correct cut-off
2. Review after-date payments; if they relate to the current year, then follow through to the payables ledger or GRNI accrual to ensure they are recorded in the correct period
3. Select a sample of purchase invoices received around the year end. Ascertain, through reviewing goods received notes (GRNs), if the goods were received pre or post year end. If post year end, then confirm that they have been excluded from the ledger.
These procedures have been given for completeness of trade payables in the answer. But these procedures seem to be related to cut off. So are these procedures correct for completeness of trade payables
Some procedures will address more than one assertion.
1. If all goods received before the y/e are included in purchases, that is relevant to completeness assertion.
2. Is absolutely a test for completeness – the primary test for understatement of liabilities is to look at post-y/e payments and confirm that if they relate to the prior year, that they are included at the reporting date.
3. Similar to 1, invoices received after the y/e in respect of GRNs before the y/e should be included in liabilities – i.e. completeness.
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