Taylor, CPA, is engaged in the audit of Rex Wholesaling for the year ended December 31, 2022.

Question:

Taylor, CPA, is engaged in the audit of Rex Wholesaling for the year ended December 31, 2022. Taylor performed a proper study of the internal control structure relating to the purchasing, receiving, trade accounts payable, and cash disbursement processes, and has decided not to proceed with tests of controls. Based on analytical procedures, Taylor believes that the trade accounts payable balance on the balance sheet as of December 31, 2022, may be understated.

Taylor requested and obtained a client-prepared trade accounts payable schedule listing the total amount owed to each vendor.

Required

What additional substantive procedures should Taylor apply in auditing trade accounts payable?

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...

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