Substantive procedures to examine the cutoff assertion for accounts payable include
A) Selecting a sample of vouchers and agreeing them to authorized purchase orders.
B) Selecting a sample of vouchers and agreeing them to the purchases journal.
C) Selecting a sample of receiving reports around year-end and comparing dates on related vouchers to dates in the purchases journal.
D) Recomputing the mathematical accuracy of a sample of vendor invoices.

Question

Quizplus · Accepted Answer

Substantive procedures to examine the cutoff assertion for accounts payable involve evaluating the accuracy of the timing of recorded transactions. Option A and B focus on the authorization of payments and may not adequately address the cutoff assertion. Option D only examines mathematical accuracy and does not address cutoff. Option C involves selecting a sample of receiving reports around year-end and comparing dates on related vouchers to dates in the purchases journal, which provides evidence of cutoff accuracy. Therefore, option C is the best choice.

Substantive Procedures to Examine the Cutoff Assertion for Accounts Payable