By tracing receiving reports issued at and before year-end to vendors' invoices and making sure they are included in accounts payable, the auditor is testing for:
A) kiting.
B) unrecorded obligations.
C) theft of merchandise by employees.
D) lapping.

Question

Quizplus · Accepted Answer

By tracing receiving reports to vendors' invoices and ensuring they are included in accounts payable, the auditor is testing for the completeness of accounts payable. This helps to detect unrecorded obligations that could lead to material misstatements in the financial statements.

By Tracing Receiving Reports Issued at and Before Year-End to Vendors