Other audit procedures: Payables and Accruals

Question 1

What represents completeness and existence?

Answer 1

Perform analytical procedures comparing payables and accruals to previous year-end, budgets or industry data

Question 2

Example of the comparison in completeness and existence?

Answer 2

Calculating payables payment period or compare accruals listing to prior year

Question 3

What represents rights and obligations?

Answer 3

Vouch selected amounts from trade accounts payables listing and accruals listing to supporting documentation such as purchase orders and suppliers’ invoices

Question 4

What represents valuation?

Answer 4

Sample of accruals, recalculating the amount of the accrual to ensure amount accrued is correct

Question 5

What represents classification?

Answer 5

Review trade accounts payables listing to identify and large debits (should be classified as receivables or deposits) or long-term liabilities which should be disclosed separately

Question 6

What represents presentation?

Answer 6

Read disclosure notes relevant to payables and accruals in the draft FSs to ensure information is accurate and properly presented at appropriate amounts