Sample size for account payable verifying cut-off assertion
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What is the sampling unit for account payable if the auditor is verifying the cutoff assertion?
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The 500 word solution includes reference material to define sampling characteristics and cut-off, but also provides a definite answer to the question with an explanation.
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When performing cut-off procedures, an auditor would be looking at invoices recorded in the period immediately following the end of the accounting period under audit. Normally the audit of subsequent invoices would extend for a minimum of 30 days after the year end. The purpose for performing cut-off procedures is to be certain that all valid liabilities are recorded in the proper accounting period, and that inventory is properly stated based on those tests.
Therefore, the sampling unit would include every invoice recorded after year end for a specified period of time.
Following are referenced definitions of cut-off and sampling units.
Cut-Off Date: Audit procedure for determining whether a transaction took place before or subsequent to the end of an accounting period. It assures that the transaction ...
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