Which audit procedure is most suitable for testing whether purchases recorded near year-end belong to the correct accounting period?
Correct answer: D. Inspection of goods received notes
- A. Recalculation of depreciation
- B. Observation of stock counting
- C. Confirmation of bank balances
- D. Inspection of goods received notes
Explanation
Goods received notes provide evidence about when goods were received, helping the auditor test the cut-off of purchases. Bank confirmations and stock observation address different audit matters.
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About Auditing
Auditing examines accounting records and financial statements to determine whether they present a reliable and fairly stated position. The subject covers audit objectives, internal controls, audit evidence, materiality, vouching, verification, working papers, auditor independence, audit reports, and the distinction between an audit and accounting or investigation.
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