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8 Cards in this Set
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- Back
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Substantive Testing of AP & Purchases (CAVE CROC)
Completeness |
tested by reconciling the AP ledger with general ledger control accounts; calculating & comparing ratios for current period with payables & searching suspense files for unmatched documents
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Substantive Testing of AP & Purchases (CAVE CROC)
Accuracy |
tested by obtaining mgt representation letter with assertions related to purchases & payables
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Substantive Testing of AP & Purchases (CAVE CROC)
Valuation & Allocation |
interrelated with those for existence & completeness and those test typically provide sufficient appropriate evidence relative to assertion
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Substantive Testing of AP & Purchases (CAVE CROC)
Existence |
generally judged low risk for material misstatement, but confirmation may be used if risk is judged at higher level
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Substantive Testing of AP & Purchases (CAVE CROC)
Cutoff |
tested by evaluating receipts for goods shipped FOB shipping points for several days; tracing receiving documents for good shipped FOB destination to accounting records; inspecting last check written & tracing it to accounts payable subsidiary ledger
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Substantive Testing of AP & Purchases (CAVE CROC)
Rights & Obligations |
tested by obtaining mgt representation about nature of recorded payables
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Substantive Testing of AP & Purchases (CAVE CROC)
Occurrence |
tested by vouching recorded payables to documentation
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Substantive Testing of AP & Purchases (CAVE CROC)
Classification & understandability |
tested by inspecting balance sheet to determine AP are properly reported as current liability on BS; reading note disclosures
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