An auditor is testing the 'Rights and Obligations' assertion for accounts payable. Which procedure is most relevant?

Answer options:

Vouching a sample of recorded payables to vendor invoices.

Reviewing the voucher register and supporting documents for indications of consignment or non-liability.

Tracing receiving reports to the accounts payable listing.

Recalculating the interest on overdue payables.

How to approach this question

Obligation = Do I owe it? Look for terms that say 'You don't owe this'.

Full Answer

B.Reviewing the voucher register and supporting documents for indications of consignment or non-liability.✓ Correct

Reviewing the voucher register and supporting documents for indications of consignment or non-liability.

Reviewing supporting documents ensures that the liability is a legal obligation of the entity and not, for example, a consignment arrangement where payment is not yet due.

Common mistakes

Confusing Existence (is it there?) with Obligations (do I owe it?).

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