In performing accounts payable and expense walkthroughs, ask questions such as: So, let’s begin our journey of auditing accounts payable and expenses. Typical accounts payable and expense work papers.Substantive procedures for accounts payable and expenses.Auditing for accounts payable and expense fraud.Risks of material misstatement for accounts payable and expenses.Common accounts payable and expense control deficiencies.Primary risks for accounts payable and expenses.Directional risk for accounts payable and expenses.Accounts payable and expense walkthroughs.Primary accounts payable and expense assertions.In this chapter, we will cover the following things an accounts payable auditor need to consider: Was a service provided or have goods been received by year-end? If yes (and the amount has not already been paid), accrue a payable. In determining whether payables exist, I like to ask, “if the company closed down at midnight on the last day of the year, would it have a legal obligation to pay for a service or good?” If the answer is yes, then record the payable even if the invoice is received after the year-end. Consequently, the company should accrue (record) the $2,000 as payable at year-end. The services were provided, but the payment was not made until after the year-end. The company owes $2,000 as of December 31, 2019. Suppose the company you are auditing receives $2,000 in legal services in the last week of December 2019, but the law firm sends the related invoice in January 2020. What is a payable? It’s the amount a company owes for services rendered or goods received.

Unprocessed invoices definition