Set tolerable misstatement and assess erent rIs Phase I for accounts payable FIGURE 18-3 Assess control Phase accounts payable Methodology for designing Tests of Details of Design and perform tests of Balances for controls and substantive tests of transactions for Phase ll Accounts Payable the acquisition and payment cycle Design and perf analytical procedures for Phase lll the acquisition and payment cycle Design tests of details Audit procedure of accounts payable Sample size balance te balance-related 「 Items to select Phase Ill Arens, Loebbecke, Auditing, &/E audit objectives Tmins ng @2000 Prentice hall. Inc
Arens, Loebbecke; Auditing, 8/E ©2000 Prentice Hall, Inc. FIGURE 18 -3 Methodology for Designing Tests of Details of Balances for Accounts Payable
Ouf-ofPeriod Liabilities Terts 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 nyoices Trace Vendors'Statements That Show a Balance Due to the Aeeeunts Payable frialBalande . Send confirmations to vendors with Which the Arens, Loebbecke, Auditing, &/E Client Does business @2000 Prentice hall. Inc
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
CLLoL-Lests Relationship of Cutoff to Physical Observation of Inventory 日 Inventory in Transit Arens, Loebbecke, Auditing, &/E @2000 Prentice hall. Inc
Arens, Loebbecke; Auditing, 8/E ©2000 Prentice Hall, Inc. Relationship of Cutoff to Physical Observation of Inventory Inventory in Transit
Distinction between Ⅴ endors nvoices an d Ⅴ endors Statements Difference between Vendors Statements and Confirmations
Arens, Loebbecke; Auditing, 8/E ©2000 Prentice Hall, Inc. Distinction between Vendors’ Invoices and Vendors’ Statements Difference between Vendors’ Statements and Confirmations
ESSEN⊥ IAL TERMS 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 Arens, Loebbecke, Auditing, &/E @2000 Prentice hall. Inc
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
