If auditors believe there is a risk that expenses incurred before year-end will be excluded from the current year's expenses, they will
A) send out confirmation requests to a sample of the client's debtors.
B) trace transactions recorded close to year-end to source documentation.
C) perform analytical review analysis on the client's statement of financial position.
D) none of the above

Question

Quizplus · Accepted Answer

Tracing transactions recorded close to year-end to source documentation is an appropriate audit procedure for determining whether expenses incurred before year-end have been included in the current year's expenses. Sending out confirmation requests to debtors and performing analytical review analysis on the statement of financial position are not relevant to this specific risk.

If Auditors Believe There Is a Risk That Expenses Incurred