Explain why the aging of accounts receivable and accounts payable is of interest to the auditors. Also, explain how this analysis helps in evaluating the judgement of management on the collectability of receivables and payment of payables in future. Determine whether a dashboard item which reflects this aging would be useful for the continuous audit.

Question

Want to see the full answer?

Answer 1

Question

Chapter 6, Problem 1P

To determine

Explain why the aging of accounts receivable and accounts payable is of interest to the auditors. Also, explain how this analysis helps in evaluating the judgement of management on the collectability of receivables and payment of payables in future. Determine whether a dashboard item which reflects this aging would be useful for the continuous audit.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

What is the purpose of analytical reviews in the audit of revenue cycle accounts? Please give an example.

Auditors try to identify predictable relationships when using analytical procedures. Relationshiipss involvingtransactions fromwhich of the following accounts most likely would yield the highest level of evidence? a. accounts receivable b. interest expense c. accounts payable d. Travel and entertainment expense

Auditors try to identify predictable relationships when using analytical procedures. Relationships involving transactions from which of the following accounts would most likely yield the highest level of evidence? a. Accounts receivable. O b. Interest expense. O c. Travel and entertainment expense. O d. Accounts payable.