Which of the following procedures would an auditor most likely perform in searching for unrecorded payables?
A) Reconcile receiving reports with related cash payments made just prior to year-end.
B) Contrast the ratio of accounts payable to purchases with the prior year's ratio.
C) Vouch a sample of creditor balances to supporting invoices, receiving reports and purchase orders.
D) Compare cash payments occurring after the balance sheet date with the accounts payable trial balance.

Question

Quizplus · Accepted Answer

To search for unrecorded payables, an auditor would likely compare cash payments occurring after the balance sheet date with the accounts payable trial balance. This procedure helps to identify any payables that were not recorded before the end of the reporting period. Reconciling receiving reports with related cash payments (A) would help to ensure that goods or services received were properly recorded, but it does not address the possibility of unrecorded payables. Contrasting the ratio of accounts payable to purchases with the prior year's ratio (B) would help to identify any significant changes in the relationship between these two accounts, but it does not specifically target unrecorded payables. Vouching a sample of creditor balances to supporting documents (C) is a standard procedure in auditing payables, but it may not detect unrecorded payables unless the sample is specifically designed to do so.

Which of the Following Procedures Would an Auditor Most Likely