ACCA AA · Chapter 11 · Question 10 of 12
Which procedure provides the best evidence of the completeness of trade payables?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Reconciling supplier statements to the payables ledger and reviewing payments made after the year end for unrecorded liabilities
Explanation
The risk for payables is understatement, so the auditor looks for liabilities that should have been recorded. Supplier statements are third-party evidence that can reveal missing invoices, and after-date payments often relate to year-end obligations. Testing from the ledger only covers recorded items, and a representation alone is insufficient.
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