Prepayments are audited by vouching the balance to the supporting invoices.

Question

Quizplus · Accepted Answer

Prepayments represent advance payments made for goods or services that will be received in the future. To verify the balance of prepayments, auditors need to examine the underlying invoices or contracts that show the nature, amount, and timing of the prepayments. By vouching the prepayments balance to the supporting documentation, auditors can ensure that the prepayments are legitimate and have not been overstated or misappropriated.

Prepayments Are Audited by Vouching the Balance to the Supporting