Which of the following procedures is an auditor most likely to perform in searching for unrecorded payables?
A)Reconcile receiving reports with related cash payments made just prior to year-end.
B)Compare the ratio of accounts payable to purchases with the prior year's ratio.
C)Vouch a sample of creditor balances to supporting invoices,receiving reports,and purchase orders.
D)Compare cash payments occurring after the balance sheet date with the accounts payable trial balance.

Question

Quizplus · Accepted Answer

To search for unrecorded payables, an auditor is most likely to compare cash payments occurring after the balance sheet date with the accounts payable trial balance. This procedure helps identify any payments made after the year-end that should have been recorded as payables. Option A is incorrect because reconciling receiving reports with cash payments made just prior to year-end would help identify any payables recorded but not yet paid, rather than unrecorded payables. Option B is incorrect because comparing the ratio of accounts payable to purchases with the prior year's ratio may be helpful in identifying trends or anomalies, but it may not necessarily identify unrecorded payables. Option C is also incorrect because vouching a sample of creditor balances to supporting documents is more likely to identify unrecorded liabilities rather than unrecorded payables.

Which of the Following Procedures Is an Auditor Most Likely