(c) Substantive procedures over year-end trade payables
– Obtain a listing of trade payables from the purchase ledger and agree to the general ledger and the financial statements.
– Reconcile the total of purchase ledger accounts with the purchase ledger control account, and cast the list of balances and the purchase ledger control account.
– Review the list of trade payables against prior years to identify any significant omissions.
– Calculate the trade payable days for Greystone and compare to prior years, investigate any significant differences.
– Review after date payments, if they relate to the current year then follow through to the purchase ledger or accrual listing to ensure completeness.
– Review after date invoices and credit notes to ensure no further items need to be accrued.
– Obtain supplier statements and reconcile these to the purchase ledger balances, and investigate any reconciling items.
– Select a sample of payable balances and perform a trade payables’ circularisation, follow up any non-replies and any reconciling items between balance confirmed and trade payables’ balance.
– Enquire of management their process for identifying goods received but not invoiced or logged in the purchase ledger and ensure that it is reasonable to ensure completeness of payables.
– Select a sample of goods received notes before the year-end and follow through to inclusion in the year-end payables balance, to ensure correct cut-off.
– Review the purchase ledger for any debit balances, for any significant amounts discuss with management and consider reclassification as current assets.
– Ensure payables included in financial statements as current liabilities.
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