() AP12.5 (LO 9) Moderate Search for unrecorded liabilities You were in the final stages of your audit of the financial statements of Ozine Corporation for the year ended December 31, 2022, when you were consulted by the corporation's president, who believes there is no point in your examining the 2023 voucher register and testing data in support of 2023 entries. He stated that (a) bills pertaining to 2022 that were received too late to be included in the December voucher register were recorded as of the year-end by the corporation by journal entry, (b) the internal auditor made tests after the year-end, and (c) he would furnish you with a letter certifying that there were no unrecorded liabilities. Required a. Should a CPA's search for unrecorded liabilities be affected by the fact that the client made a journal entry to record 2022 bills that were received late? Explain. b. Should a CPA's search for unrecorded liabilities be affected by the fact that a letter is obtained in which a responsible management official certifies that to the best of his knowledge all liabilities have been recorded? Explain. c. Should a CPA's search for unrecorded liabilities be eliminated or reduced because of the internal audit tests? Explain. d. Assume that the corporation, which handled some government contracts, had no internal auditor but that an auditor for a federal agency spent three weeks auditing the records and was just completing his work at this time. How would the CPA's unrecorded liability search be affected by the work of the auditor for a federal agency? e. What sources, in addition to the 2023 voucher register, should the CPA consider to locate possible unrecorded liabilities? (AICPA adapted) AP12.6 (LO 9) Moderate Substantive tests for accounts payable 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? (AICPA adapted)