Under which of the following circumstances would it be advisable for the auditor to confirm accounts payable with creditors?
A) The internal accounting control over accounts payable is effective, and there is sufficient evidence on hand to minimize the risk of a material misstatement.
B) The confirmation response is expected to be favorable, and accounts payable balances are of immaterial amounts.
C) The creditor statements are not available and internal control over payables is deficient.
D) The majority of accounts payable balances are with associated companies.

Question

Quizplus · Accepted Answer

If creditor statements are not available and internal control over payables is deficient, then confirming accounts payable balances with creditors would be advisable to obtain necessary information and ensure accuracy. In all other circumstances described in the options, confirming accounts payable may not be necessary or the benefits may not outweigh the costs.

Under Which of the Following Circumstances Would It Be Advisable