completeness assertion for accounts payable
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Explain the purpose and importance of the completeness assertion for accounts payable.
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Solution Summary
Your response is 180 words in everyday language suitable for a novice. The discussion explains the financial statement misstatement risk in payables, how the completeness assertion fits into this risk and how it is typically tested.
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The major financial statement misstatement risk in the Acquisition and Expenditure Business Process cycle is that the items in payables are either too low or missing. The completeness assertion is about what is missing. Why? Management has no incentive (typically) to bulk up payables by recording expenses that don't exist. But, leaving off ...
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