Recap of payables
In this recap lesson, you'll consolidate your understanding of payables and accruals—two critical current liabilities you need to audit confidently.
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In this lesson
- 0:00 Auditing payables and accruals overview
- 0:19 Understanding payables and accruals
- 0:25 The purchases cycle and accounting flow
- 2:13 Supplier statements and reconciliation
- 3:07 Key audit risks for payables
- 4:20 Audit assertions and procedures framework
- 4:45 Testing completeness and obligations
- 5:29 Testing valuation and existence
About this lesson
You'll learn how trade payables and accruals differ, trace the accounting flow from purchase order through to the statement of financial position, and understand the role of supplier statements in control procedures. The video then shifts to audit risk and procedure. The primary risk with payables is understatement—purchases on credit being missed or recorded in the wrong period (cut-off issues). You'll see how to apply the five audit assertions (completeness, obligations and rights, valuation, existence, and accuracy) to design specific, high-marking audit procedures that test whether all payables are included, genuinely owed, correctly valued, and properly recorded. This is essential preparation for Audit and Assurance (AA) papers and case study scenarios where payables testing is a routine audit area.
Duration: 6m
Transcript
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