Arens,Loebbecke; Auditing,8/E
2000 Prentice Hall,Inc.
FIGURE 18 -3
Methodology for Designing
Tests of Details of
Balances for
Accounts Payable
Arens,Loebbecke; Auditing,8/E
2000 Prentice Hall,Inc.
Out-of-Period Liabilities Tests
Examine Underlying Documentation for
Subsequent Cash Disbursements
Examine Underlying Documentation for Bills Not Paid
Several Weeks after the Year-End
Trace Receiving Reports Issued before Year-End to
Related Vendors’ Invoices
Trace Vendors’ Statements That Show a Balance
Due to the Accounts Payable Trial Balance
Send Confirmations to Vendors with Which the
Client Does Business
Arens,Loebbecke; Auditing,8/E
2000 Prentice Hall,Inc.
Relationship of Cutoff to Physical
Observation of Inventory
Inventory in Transit
Arens,Loebbecke; Auditing,8/E
2000 Prentice Hall,Inc.
Distinction between
Vendors’
Invoices and
Vendors’
Statements Difference between
Vendors’
Statements and
Confirmations
Arens,Loebbecke; Auditing,8/E
2000 Prentice Hall,Inc.
Accounts payable master file FOB origin
Accounts payable trial balance Purchase order
Acquisition and payment cycle Purchase requisition
Cutoff tests Receiving report
Debit memo Vendor’s invoice
FOB destination Vendor’s statement