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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 Preview

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

    Solution Summary

    Two potential procedures are given.