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    Accounts payable and risks inherent in the payroll cycle

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    Explain the purpose and importance of the completeness assertion for accounts payable.

    Explain some major risks inherent in the payroll cycle. How can these risks be mitigated?

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    https://brainmass.com/business/the-accounting-cycle/accounts-payable-and-risks-inherent-in-the-payroll-cycle-501035

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    Explain the purpose and importance of the completeness assertion for accounts payable.

    The completeness assertion is crucial for accounts payable. A common financial statement misstatement involves companies moving current liabilities from accounts payable to long term liabilities or to some other account in order to improve their financial statement liquidity ratios. When a company begins to drown in their accounts payable balance, it diminishes the financial strength of their balance sheet. In addition, many companies have debt covenants in place attached to their long term and short term debt, and the covenants ...

    Solution Summary

    This solution explains the purpose and importance of the completeness assertion for accounts payable. This solution also explains some major risks inherent in the payroll cycle and how these risks can be mitigated.

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