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The substantive procedures for the examination of purchases would normally be coordinated with the audit program...

The substantive procedures for the examination of purchases would normally be coordinated with the audit program for which of the following balance sheet accounts?
A. Additional Paid in Capital
B. Accounts receivable
C. Accounts payable

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Answer #1

C. Accounts Payable.

When Substantive procedure for purchases is performed, it may include confirmation of accounts payable too. The Auditor tests the cut off by inspecting the purchase transaction file,stock receiving records, creditors/ suppliers invoices and other supporting docments before and sfter the cut off date to determine that the transactions are recorded in the proper period.

The auditor may trace some invoices outstanding at year end to payments made after year end and, vice versa, as additional tests on existence and completeness.

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