Payables & accruals

Question 1

How to test completeness and existence?

Answer 1

1. Compare payables and accruals to the previous year end, budgets or industry data, e.g. calculating payables payment period or compare accruals listing to prior year

Question 2

How to test rights and obligations?

Answer 2

1. Payables listing and accruals listing to supporting documentation such as purchase invoices or suppliers’ invoices

Question 3

How to test classification?

Answer 3

1. Review the trade accounts payables listing to identify any large debits (which should be reclassified as receivables or deposits) or long term liabilities which should be disclosed separately

Question 4

How to test presentation?

Answer 4

1. To ensure the information is accurate and properly presented at the appropriate amounts