Page 88 - Demo

جميع الحقوق محفوظة ـ اإلعتداء عىل حق املؤلف 88 بالنسخ أو الطباعة يعرض فاعله للمسائلة القانونيةo 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 ledgero 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.