Describe the Audit Procedures Typically Used to Test for Out-Of-Period

question 143

Essay

Describe the audit procedures typically used to test for out-of-period liabilities (also referred to as the search for unrecorded accounts payable).

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Definitions:

Originally Reported

Originally reported refers to the initial financial figures or data that were officially announced or published by a company or organization.

Prepaid Revenue

Income received by a company for goods or services to be delivered or performed in the future, recorded as a liability on the balance sheet until earned.

Depreciation Expense

The allocated amount of the cost of a tangible or physical asset over its useful life, reflecting the decrease in the asset’s value due to use and/or age.