Page 86 - Auditinf Electronic System

o Test of inventory in transit at year end, may require additional
investigation, such as inspection of supporting documents.

6. Right and obligations: The focus is on obligations, that the company has an
obligation to pay the liabilities included in accounts payable:
o Examine vendor’s invoice
o Confirm accounts payable

The rights aspect of the rights and obligation’s objective is not applicable to
liabilities. For liabilities, the auditor is concerned with the client’s obligations
for the payment of the liability.
For liabilities, there is emphasis on the search for understatements rather than
for overstatements, as we just discussed

7. Realizable value: not applicable to liabilities. Realizable value applies only to
assets

8. Detail tie-in: Accounts payable in accounts payable list agree with related
master file, and the total is correctly added and agrees with the general ledger
o Recalculations of accounts payables totals
o Trace each vendor`s invoice to master file for names and amounts
When control risk is assessed as low, the auditor can reduce substantive
testing of ending balances in the related accounts.
On the other hand, a higher assessed control risk results in the need for more
substantive testing in related accounts.

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‫جميع الحقوق محفوظة ـ الإعتداء على حق المؤلف بالنسخ أو الطباعة يعرض فاعله للمسائلة القانونية‬