Which of the following audit procedures is best for identifying unrecorded trade accounts payable?

Question

Quizplus · Accepted Answer

Choice "C" is correct. Unrecorded trade accounts payable are best identified by reviewing cash disbursements recorded subsequent to the balance sheet date to determine whether the related payables apply to the prior period. Choice "A" is incorrect. There is not usually a predictable relationship between accounts payable and cash payments, because management can pay cash or incur additional liabilities at its discretion. Choice "B" is incorrect. Reconciling vendors' statements to the file of receiving reports would not identify unrecorded payables, as the vendor statement would still agree with the receiving report even if the payable were not recorded. Choice "D" is incorrect. Investigating payables already recorded would not help identify unrecorded trade payables.

Which of the Following Audit Procedures Is Best for Identifying