Financial Information
Describe the audit circumstances in which the auditors are likely to decide to confirm accounts payable?
Question : Describe the audit circumstances in which the auditors are likely to decide to confirm accounts payable?
Principles of Auditing
This is an internal control and Auditing class taken in the United States
Auditing Financial Statements United States
The confirmation of accounts payable is not a generally accepted auditing procedure. Describe the audit circumstances in which the auditors are likely to decide to confirm accounts payable
Weak Internal Control Over Accounts Payable
Lack of Vendor’s Statements
What else?
Is this answer correct?
accounts payable audit
Best answer:
Answer by Lady Mala
Purchase agreements agree with vendor invoices, balance invoices against checks, what internal controls can be used to ensure accounts payable are accurate? Never pay for inventory until receiving a receiving report and an invoice. Accounts payable aren’t usually a big concern, it’s receivables that get all the attention. But the payable clerks have to ascertain that they are paying only for what has been received. And pay attention to payment terms.
Auditor’s will do confirmation of payables if the ledger shows long over-due accounts (which would mean payments are not either paid to the right person/company or payment was not really made) of which there are no subsequent payments made.
Also, when even if the company has long outstanding payables, the supplier continuously deliver goods/services. This is surely impossible because if you are not a good payor nobody will grant another credit.