The search for unrecorded liabilities is an audit procedure
A)done at year-end to determine whether the client has recorded all liabilities at year-end
B)done after year-end to determine whether the client has recorded any liabilities after year-end
C)done after year-end to determine whether the client has recorded all liabilities at year-end
D)done before year-end to determine whether the client has recorded all liabilities

Question

Quizplus · Accepted Answer

The search for unrecorded liabilities is typically done after year-end to determine whether the client has recorded all liabilities at year-end. This is because the audit is focused on ensuring the financial statements are presented fairly and accurately as of the balance sheet date (year-end), and unrecorded liabilities could impact the financial statements. Doing this procedure before year-end would not be effective as liabilities may still arise after the audit is completed. Doing it after year-end allows the auditor to obtain information on transactions that may have occurred between year-end and the date of the auditor's report.

The Search for Unrecorded Liabilities Is an Audit Procedure