Chapter 10: SP - Trade Payables

Question 1

General Procedures (6)

Answer 1

1. Agree list of creditors in ledger with the control account and financial statements.
2. Circularization
   No response>alternative
   exceptions>additional
3. Examine subsequent payments to creditors
4. Correctly classified presented. Inquire about RP disclosures
5. Review control accounts shortly before and after year end for unsual items
6. Review aging report of creditors

Question 2

Completeness (5)

Answer 2

1. Perform cut-off test on purchases
2. Inspect pending GRNs (goods recevied but no invoice) and ensure they are recorded at balance sheet date
3. Compare account statement sent by supplier with respective ledger account
4. review significant payment made after year end and check if any liability relates to current year
5. Review list of creditors from previous year > identify major supplier > check if any ommited or amount declined significantly. Inquire reasons