Which of the following statements is correct regarding accounts payable and the auditor's procedures?
A) Because it is generally more difficult to discover a transaction that has not been recorded than to discover one that has been recorded incorrectly, the audit objective of completeness drives many of the substantive procedures applied to these balances.
B) A judgment whether an unrecorded payable should be recorded before the financial statements are prepared depends entirely upon the source of the payable.
C) The confirmation of accounts payable selected from the year-end trial balance of such accounts is most effective in discovering unrecorded liabilities.
D) Unrecorded payables are often discovered through examining vouchers payable entered into the voucher register prior to the balance sheet date.

Question

Quizplus · Accepted Answer

The audit objective of completeness drives the substantive procedures applied to the balances of accounts payable. This is because it is generally more difficult to detect a transaction that has not been recorded than to detect one that has been recorded incorrectly. Therefore, the auditor's procedures aim to ensure that all liabilities that should be recorded have been recorded, and that the balances are complete.

Which of the Following Statements Is Correct Regarding Accounts Payable