The following are two specific balance-related audit objectives in the audit of

Question

The following are two specific balance-related audit objectives in the audit of accounts payable. The list referred to is the list of accounts payable taken from the accounts payable master file. The total of the list equals the accounts payable balance on the general ledger. -All accounts payable included on the list represent amounts due to valid vendors. -There are no unrecorded accounts payable. Explain the difference between these two specific balance -related audit objectives. Which of these two specific balance-related audit objectives applies to the general balance-related audit objectives of existence, and which one applies to completeness? For the audit of accounts payable, which of these two specific balance-related audit objectives is usually more important? Explain.

Explanation / Answer

The balance related audit objectives are

a) Completeness

b) Existence

Answers

a) While existence represents the amount due completeness tell us that transaction is complete in all respect.

b) 1) Completeness

2) Existence

c) Both are important but completeness is more important as it tells us about the authencity of closing balances and all the transactions.

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