Which of the Following Audit Procedures Is Best for Identifying

question 17

Multiple Choice

Which of the following audit procedures is best for identifying unrecorded trade accounts payable?

• A)Reviewing cash disbursements recorded subsequent to the balance sheet date to determine whether the related payable applies to the prior period.
• B)Investigating payables recorded just prior to and just subsequent to the balance sheet date to determine whether they are supported by receiving reports.
• C)Examining unusual relationships between monthly accounts payable balances and recorded cash payments.
• D)Reconciling vendors' statements to the file of receiving reports to identify items received just prior to the balance sheet date.

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Definitions:

Payment Methods

Various ways through which businesses or individuals can settle transactions, including cash, credit/debit cards, electronic funds transfer, and checks.

Pay Scheduled Liabilities

The process of making payments towards debts or obligations that are due according to a predetermined schedule.

Pay Employees

The process of compensating workers for their services, typically referring to issuing paychecks or direct deposit payments for wages or salaries.

Write Checks

The action of completing a check to make a payment from a bank account, including details such as the date, payee name, and amount.