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

Question

Quizplus · Accepted Answer

Choice "A" is correct. When performing a search for unrecorded payables, an auditor most likely would examine cash disbursements recorded after the balance sheet date to determine whether the payables related to the prior period have been included in the accounts payable trial balance. Choice "B" is incorrect. Investigating payables already recorded does not provide any evidence concerning unrecorded payables. Choice "C" is incorrect. While a high level of cash payments compared with a low level of payable balances may be indicative of unrecorded payables, comparing these amounts would not be the most effective method for identifying unrecorded payables. Choice "D" is incorrect. Comparing vendor statements to receiving reports is an audit step not involving the accounts payable balances; this step, therefore, provides no information about accounts payable.

Which of the Following Audit Procedures Is Best for Identifying