[thebusyone]

A Becker flashcard says, “Confirmation of recorded accounts payable will not provide evidence regarding unrecorded liabilities.”

I don’t understand. Why is this? Don’t vendors have every reason to report a higher liability if necessary?

______________________
BEC - 4/4/11 - 83
REG - 1/4/12 - 82
AUD - 2/18/12 - 77
FAR - 5/31/12 ? 88
Ethics - 6/13/12 - 95

[Anonymous]

I believe it would be because if a company being audited does not record any liability to a vendor then the auditor will not pull that vendor for a confirmation. This is because the vendor will not show up on the audited company's financial statements as a payable.

Hope that makes sense.

[thebusyone]

*light bulb moment*

Thanks!

______________________
BEC - 4/4/11 - 83
REG - 1/4/12 - 82
AUD - 2/18/12 - 77
FAR - 5/31/12 ? 88
Ethics - 6/13/12 - 95

[Anonymous]

You're welcome.

Good luck

[Author]

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