You are concerned with unrecorded transactions in the purchasing cycle. Which audit procedure are you most likely to use when auditing purchases?
A)Vouching transactions in accounting records to vendor invoices.
B)Tracing vendor invoices to accounting records.
C)Recalculation of vendor invoice amounts.
D)Confirmation of customer accounts.

Question

Quizplus · Accepted Answer

Tracing vendor invoices to accounting records is the most appropriate audit procedure for detecting unrecorded transactions in the purchasing cycle. This procedure involves selecting a sample of vendor invoices and tracing them to the accounting records to ensure that they have been properly recorded. If any invoices are found that have not been recorded, the auditor can investigate further to determine why this has occurred and whether there are any other unrecorded transactions that need to be addressed. Vouching transactions in accounting records to vendor invoices and recalculating vendor invoice amounts are more appropriate audit procedures for detecting overstatement or errors, rather than unrecorded transactions. Confirmation of customer accounts is not relevant to auditing purchases.

You Are Concerned with Unrecorded Transactions in the Purchasing Cycle