You are auditing the company's purchasing process for goods and services.You are primarily concerned with the company not recording all purchase transactions.Which audit procedure below would be the most effective audit procedure in this case?

Question

Quizplus · Accepted Answer

Tracing vendor invoices to recorded amounts in the accounts payable account would be the most effective audit procedure to detect if the company is not recording all purchase transactions. This procedure involves verifying if all the vendor invoices have been recorded in the accounts payable account, ensuring that all the expenses are properly recognized and reported in the financial statements. Vouching from the accounts payable account to the vendor invoices and reconciling the accounts payable subsidiary ledger to the accounts payable account may also help to detect discrepancies, but they are not as effective as tracing vendor invoices. Confirmation of accounts payable recorded amounts would only provide evidence about the completeness and accuracy of the recorded amounts, but it would not necessarily detect unrecorded purchase transactions.

You Are Auditing the Company's Purchasing Process for Goods and Services.You