Alternative procedure suggestions

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1. Dear [Poster’s Name],

   In situations where we’re unable to obtain an accounts payable confirmation from a third party, there are several alternative procedures we can consider to gather sufficient Audit evidence:

   1. Direct Communication with Vendors: Reach out directly to the vendors in question to obtain verbal or written confirmations of account balances. Document these communications for your records.

   2. Review Internal Documentation: Examine the client’s internal records such as purchase orders, invoices, and payment history. This can help corroborate the existence and amount of the liabilities.

   3. Substantive Analytical Procedures: Perform analytical procedures to assess the reasonableness of the accounts payable balances. This could involve trend analysis or ratio analysis compared to prior periods or budgets.

   4. Examine Subsequent Payments: Look for any payments made after the fiscal year-end to verify the existence of the payable. This can provide evidence that the liability existed at year-end.

   5. Check for Cut-off Procedures: Ensure that transactions are recorded in the appropriate period by examining related cut-off procedures and related documentation.

   6. Test Transactions: Select a sample of transactions to verify their occurrence and completeness by tracing them back to the related invoices and payment records.

   7. Consult with Management: Discuss with management and the finance team to gather insight on the reasons for the lack of confirmations and any controls in place to mitigate this risk.

   Each of these alternative procedures can help build sufficient Audit evidence in the absence of direct confirmations. It’s also good practice to document the rationale for the procedures performed and any limitations encountered.

   Best regards,
   [Your Name]

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