Question

when the auditor have found subsidiary records of accounts payable not in agreement with the general ledger control account, haphazard use of receiving reports and vouchers and purchase transactions not recorded until payment is made they should undertake extensive ___ work

Answer 1

When faced with discrepancies in accounts payable records, the auditor should undertake extensive reconciliation work to ensure the accuracy and integrity of the records.

Step-by-step explanation:

In this scenario, when the auditor finds subsidiary records of accounts payable not in agreement with the general ledger control account, haphazard use of receiving reports and vouchers, and purchase transactions not recorded until payment is made, they should undertake extensive reconciliation work.

This involves comparing the subsidiary records with the general ledger control account to identify and correct any discrepancies. The auditor will need to trace and verify the transactions, examine supporting documents like receiving reports and vouchers, and ensure that all purchase transactions are properly recorded.

By conducting this extensive reconciliation work, the auditor can ensure the accuracy and integrity of the accounts payable records, improving the overall reliability of the financial statements.