Question

Identify the primary audit objectives for an accrued liability account such as Bankrate’s SEM accrual. What circumstances relevant to accrued liabilities can prove to be particularly challenging for auditors?

Answer 1

Answer :

The primary objective of auditor is to give opinion weather financial statements show true or fair view or not. In order to fulfill this objective they have to make sure accrued liabilities are not understanding or overstated. The auditor should specially remain conscious to ensure accrued liabilities are not omitted or understated than overstatement of liabilities.

Particularly challenging

The particularly challenge for auditors regarding accrued liabilities is at yearend balance. Clients often try to postpone the accrued liabilities at yearend. The auditors should ensure the correct cut off is applied and the balance at yearend is accurate.