Every schedule he reviewed was properly prepared, with tick marks entered and explained by Little, indicating that he had made an extensive examination of underlying data and documents and had found the client’s balance to be adequate as stated.
Testing primarily involves reviewing the liability recorded by the client by examining subsequent payments to suppliers and other creditors to ensure that they were correctly recorded.
Lenape observed that Little was spending a lot of time on the phone, apparently on personal matters.
Speciﬁcally, there were no payments subsequent to year-end for inventory purchases received during the audit period that had not been accrued by the company.
LEAR N I N G O B J ECTIVES After studying this chapter, you should be able to 24-1 Design and perform audit tests related to presentation and disclosure audit objectives.