In assessing control risk for purchases,an auditor vouches a sample of entries in the accounts payable trial balance to the supporting documents.Which account assertion would this test of controls most likely support?
A)completeness
B)valuation and allocation
C)existence and occurrence
D)presentation and disclosure

Question

Quizplus · Accepted Answer

Vouching a sample of entries in the accounts payable trial balance to supporting documents would most likely support the existence and occurrence assertion, as it provides evidence that the recorded payables actually exist and that the underlying transactions did occur. It provides assurance that the liabilities are not overstated, understated or fictitious. Completeness assertion would be tested by vouching supplier invoices and ensuring all such invoices are recorded. Valuation and Allocation would be more likely to be tested through other procedures such as confirmation of liabilities with the creditors, or by computing the accruals. Presentation and disclosure assertion would be tested by checking whether the payables are properly classified on the financial statements and that the notes provide adequate disclosure of payables.

In Assessing Control Risk for Purchases,an Auditor Vouches a Sample