Which of the following might an auditor do in testing for the existence of accounts payable?
A)Review client's financial statement disclosure.
B)Review long-term purchase commitments.
C)Perform a cutoff test of purchases and cash disbursements.
D)Perform analytical review of related expense accounts.

Question

Quizplus · Accepted Answer

Testing for the existence of accounts payable would involve performing a cutoff test of purchases and cash disbursements to ensure that they have been recorded in the correct period and matched to the appropriate vendor balances. Reviewing financial statement disclosure may provide information on accounts payable policy or changes in the balance, but it would not directly test for existence. Reviewing long-term purchase commitments and performing an analytical review of related expense accounts would not specifically test for existence either.

Which of the Following Might an Auditor Do in Testing