CPA Flashcards
Auditors confirmation of AP balances at the balance sheet date maybe be unnecessary
Because documents supporting AP balances come from more reliable external source
When auditing AP and other liabilities Auditor focuses
on Completeness (not to understate). and it tests existence
Effective internal control in AP department
Establish agreement vendor’s invoice, PO, receiving report
Trace PO and receiving report to cash and PO journals
To determine PO were properly recorded
To search for unrecorded Payable
Compare Cash payments after Bal Sheet date with AP trial balance
Population for Completeness assertion for AP
Vendors with whom done business previously
Auditor least likely to perform before balance sheet date
Confirmation of AP
FOB Sipping point
When Items were shipped they were ours for customer
To test existence and occurrence of AP auditor
Vouch selected AP to the voucher packages
Auditor can send only 2 tipes of AP confirmations
Positive or blank
Auditor may use AP confirmations if
Monthly vendor’s statements are no available
Auditor check internal control on purchases. Improper segregation of duties
If Purchasing department obtain approval on requsition
Auditor would LEAST LIKELY to perform during audit of accounts
Send out AP confirmation (it send only if IC weak, dispute or there are no vendor statements)
Completeness assertion for purchases
PO, receiving report, vouchers prenumered and accounted for
Which account aid that all fixed assets capitalized?
R&M
