Accounts paayable confirmations

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Discussion Topic:

Mincin, CPA is the auditor of the Raleigh Corporation. Mincin is considering the audit work to be performed in the accounts payable area for the current year's engagement. The prior year's working papers show that confirmation requests were mailed to 100 of the 1,000 suppliers. The selected suppliers were based on a sample which was assigned to select accounts with large dollar balances. A substantial number of hours was spent by Raleigh and Mincin in resolving relatively minor differences between the confirmation replies and the accounting records. Alternative audit procedures were used for supplier who did not respond to the confirmation requests.

Required:

a) Discuss the account payable audit objectives

b) Discuss situations in wihc the auditor should use accounts paayable confirmations and discuss wheter the auditor is required to use them.

c) Discuss why the use of large-dollar balances as the basis for selecting accounts payable for confirmation might not be the most efficient approach, and indicate what more efficient procedures could be selected for accounts payable conformation.

d) Discuss how analytical procedures could be use to help resolve some of the issues related to the audit objectives.

Reference no: EM13130371

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