Confirmation of Trade Payables (1)

Question 1

Why is undertaking confirmation of trade payables not a great deal in practice?

Answer 1

Auditor can test trade payables by examining reliable, independent evidence in the form of suppliers’ invoices and statements

Question 2

What happens where an entity’s internal controls are assessed as deficient?

Answer 2

Supplier’s statement may not be available, and it may be relevant to undertake confirmation procedures

Question 3

What does confirmation of trade payables provide?

Answer 3

Evidence primarily for the completeness assertion

Question 4

What happens when entity has strong controls in place to ensure all liabilities are recorded

Answer 4

Confirm large balances

Question 5

What if entity does not have strong controls in place to ensure all liabilities are recorded (balances)

Answer 5

Confirm large balances

Question 6

What if entity does not have strong controls in place to ensure all liabilities are recorded (suppliers)

Answer 6

Confirm other suppliers with a small or zero balance

Question 7

What if entity does not have strong controls in place to ensure all liabilities are recorded (sample)

Answer 7

Confirm a sample of other accounts