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Unrecorded payables

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The auditor may perform analytical procedures related to the completeness of purchases and payables. An example would involve a comparison of purchases to the underlying physical business such as a comparison purchases to production levels. In addition, the auditor should be alert for a current ratio that looks too good.

Describe two other procedures an auditor most likely would perform in searching for unrecorded payables.

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Solution Summary

Two potential procedures are given.

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One procedure is to look at the payments for the month or two following year end. Review any large ones to see if ...

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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