Question

what is your plan to do when you are audited accounts payable?

write 5 paragraph including introduction and conclusion

write with 500 words at least

Answer 1

Sol:

Introduction : Accounts Payable means money owed by a company to its suppliers . When purchase of goods or services by a company is made on a credit basis which needs to pay back to its creditors in a decided period of time, it is known as Accounts Payable , which is recorded in the balance sheet as liability.

Accounts payable is an important area of business to audit because of high risk . This function to be managed effectively by the company.

Having strong controls, proper procedures followed , checklist & regular audit is required for this function.

Auditor needs to prepare audit checklist as follows:

1) Whether accounts payable and cash disbursements are properly authorised.

2) To see that the recorded accounts payable balances are substantial and evaluate.

3) Verify accounts payable records and cash disbursements are safeguard.

4) Check that bill booking without purchase orders.

5) Verify that double payment against same invoice number.

Conclusion:

By performing audit procedures, and evaluating internal controls for Accounts Payable , atleast auditor can reduce risk at reasonable level.