The auditor decided to test accounts payable by sending confirmations to selected vendors. The auditor's best approach in selecting the vendor accounts to confirm is to __________.
A) select vendor accounts with large balances
B) select vendor accounts at random in order to apply a statistical sampling procedure
C) select vendor accounts with small or zero balances
D) select vendor accounts that are past due

Question

Quizplus · Accepted Answer

Selecting vendor accounts with small or zero balances would be the best approach as these are less significant accounts and are more likely to have errors or irregularities. Selecting accounts based on large balances or that are past due may be useful in identifying potential fraud or other issues, but may not provide a representative sample for testing overall accounts payable. Random sampling could be an option, but selecting accounts with zero or small balances would still be more effective in identifying potential errors.

The Auditor Decided to Test Accounts Payable by Sending Confirmations