Describe the methodology for designing tests for the details of balances in accounts payable. How would your methodology impact the rest of the audit?
Let me start by saying that, as a part of most audits, auditors are required to prepare an audit program that outlines and describe the steps and work to be conducted in an audit engagement. Typically, an audit program normally specifies the name of the auditor responsible for a given job and the estimated time to conduct the audit task. It is very important that auditors prepare audit programs, as it is used to guide and control the work of staff assistants and it can be used to track when a task is conducted and by whom.
Depending on the audit firm in question, the methodology that an auditor will use in designing its audit program may vary from firm to firm. One of the most important factors that may cause it to vary is the size of the firm, as an audit program for a small firm may be less detailed than one written for a larger firm. For the question given, you are basically being asked to list and describe the steps that are to be taken by an auditor when testing the details of balances in accounts payable.
Before listing the steps you ...
In this solution a brief overview is first given of audit programs and the purpose they serve. Secondly, a discussion as to the steps that are to be taken by an auditor when testing the details of balances in accounts payable is given. The solution then concludes with how the design of such an audit program can impact the overall audit. This solution is 676 words.