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Audit

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Purchase amounts need to be posted or recognized in the correct period (posted in the period or month in which the transaction occurred), and payment made in advance in the correct period (posted are recognized in the period in which the transaction took place. Often times invoices are received after the accounting date and may not match what is posted or the purchase amount may not be accrued (posted in relevant period) any at all. Similarly, amounts may be paid before the accounting date but must be recognized or posted only when the transaction takes place. Therefore audit testing must not be done until after the accounting year end. The company depends on accurate information on balances such as the accounts payable balance. This is important for accurate decision making purposes. Auditors therefore need to ensure that amounts paid in advance are not posted in the wrong period, or a ...
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