（a）As regards accounts payable there are many different assertions that have to be addressed. Some relevant assertions are set out below:
(i) Rights and obligations – Accounts payable represent amounts actually due by the company, that is, there is an obligation, taking into account:
– the actual performance of services for the company; or
– transfer of title in goods transferred to the company; and
– cash payments or other genuine debit entry.
(ii) Valuation and allocation – Accounts payable have been correctly valued taking into account original transaction amounts and such matters as trade discounts and local sales tax.
(iii) Existence – The original transaction amounts are valid and the liability exists.
(iv) Completeness – All accounts payable are recorded in the accounting records.
(Tutorial note: The importance of assertions lies in the fact that they provide objectives for the auditor and enable the evidence search to be carried out in a logical fashion. The auditor will determine the assertions that are made about a particular figure appearing in the financial statements. This provides a series of objectives about that audit area and then the auditor searches for evidence to prove that each objective is met and that the assertion is valid or invalid.)
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