To test for cutoff errors which overstate liabilities, the auditor should trace the receiving reports issued ________ to vendors' invoices.
A) after year-end
B) before year-end
C) the last day of the fiscal year
D) both before and after year-end

Question

Quizplus · Accepted Answer

Tracing receiving reports issued after year-end to vendors' invoices helps identify liabilities that were recorded in the wrong period, potentially overstating liabilities at year-end.

To Test for Cutoff Errors Which Overstate Liabilities, the Auditor