Explain the purpose and importance of the completeness assertion for accounts payable.
Level : Master in Accounting and topic is internal control© BrainMass Inc. brainmass.com June 24, 2018, 2:58 pm ad1c9bdddf
The biggest risk in accounts payable is that there will be amounts left off, not that they will be overstated. Why is this? Because there is usually no temptation or tendency for managers to show extra expenses and understate their earnings. So, while it is good practice to confirm a few payables to be sure the controls are working, the biggest assertion surrounding accounts payable is that they are complete - meaning nothing is left out.
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Your tutorial is 274 words and explains the purpose and importance of the completeness assertion for accounts payable. Examples are given for intentional and unintentional threats to the completeness assertion, motivating the need for controls surrounding this assertion.