Which of the following tests of details most likely would help an auditor determine whether accounts payable have been misstated?
A)Examining reported purchase returns that appear too low.
B)Examining vendor statements for amounts not reported as purchases.
C)Search for customer-returned goods that were not reported as returns.
D)Reviewing bank transfers recorded as cash received from customers.

Question

Quizplus · Accepted Answer

Examining vendor statements for amounts not reported as purchases can help an auditor determine whether accounts payable have been misstated as it would reveal whether there are any unrecorded liabilities owed to vendors which should have been recorded as accounts payable. Option A refers to purchase returns which are a contra account to accounts payable and would not necessarily indicate whether accounts payable have been misstated. Option C refers to customer returns which would not provide information on accounts payable. Option D involves cash received from customers and is not directly related to accounts payable.

Which of the Following Tests of Details Most Likely Would