Which of the following is a substantive procedure that an auditor most likely would perform to verify the existence of recorded accounts payable?
A) Investigating the open purchase order file to ascertain that prenumbered purchase orders are used and accounted for.
B) Receiving the client's mail, unopened, for a reasonable period of time after the year-end to search for unrecorded vendor's invoices.
C) Vouching selected entries in the accounts payable subsidiary ledger to purchase orders and receiving reports.
D) Confirming accounts payable balances with known suppliers who have zero balances.

Question

Quizplus · Accepted Answer

Vouching selected entries in the accounts payable subsidiary ledger to purchase orders and receiving reports is a substantive procedure that an auditor most likely would perform to verify the existence of recorded accounts payable. This procedure involves tracing recorded accounts payable entries back to the original purchase orders and receiving reports to ensure that the liabilities exist and are valid. Investigating the open purchase order file (A) would be a test of completeness, while receiving the client's mail (B) would be an illegal and unethical practice. Confirming accounts payable balances with suppliers who have zero balances (D) would not verify the existence of recorded accounts payable, as zero balances could be due to payment or no transaction activity.

Which of the Following Is a Substantive Procedure That an Auditor