- 12 Marks
AA – L2 – Q40 – Audit Evidence
Discuss the pros and cons of stating or not stating the balance in a confirmation letter to suppliers List substantive procedures to verify the amount of trade payables in the payables ledger. List substantive procedures to identify unrecorded liabilities in the payables ledger.
Question
n your audit procedures to date you have found a large number of misstatements in your client’s payables ledger. You have decided to write to a number of trade payables to obtain direct confirmation of the balances due.
Required
(a) The confirmation letter to the suppliers could either state the balance or ask the supplier to give the balance himself. Set out the arguments for each of these two approaches.
(b) List other substantive procedures which you could use to verify the amount of trade payables.
(c) List the substantive procedures you would carry out to discover the existence of unrecorded liabilities.
Find Related Questions by Tags, levels, etc.
- Tags: Audit Evidence, Payables Ledger, Substantive Procedures, Unrecorded Liabilities
- Level: Level 2
- Topic: Audit Evidence
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