Alternative procedure suggestions

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1. Dear [Poster’s Name],

   In situations where you do not receive accounts payable confirmations from a third party, there are several alternative procedures you can consider to obtain sufficient Audit evidence:

   1. Subsequent Payments Review: Check for payments made after the reporting period and assess whether they relate to the outstanding payables. You can trace these payments back to supplier invoices to validate their authenticity.

   2. Vendor Statements: Obtain direct statements from vendors instead of confirmations. Comparing vendor statements with the client’s accounts payable can help identify discrepancies or unrecorded liabilities.

   3. Cut-off Tests: Conduct cut-off tests around the period end to ensure that transactions are recorded in the appropriate period. This can be accomplished by reviewing invoices received and expense recognition close to year-end.

   4. Analytical Procedures: Perform analytical procedures on accounts payable balances and transaction trends. This may help identify any unusual fluctuations or relationships that warrant further investigation.

   5. Review of Purchase Orders: Examine purchase orders created during the Audit period and their corresponding receiving reports or invoices to validate that obligations exist.

   6. Inquiries with Management: Make inquiries with management and relevant personnel regarding the status of significant vendors and any unresolved items related to accounts payable.

   7. Substantive Testing on Samples: Select a sample of accounts payable balances and perform substantive testing on underlying documentation such as invoices, contracts, and payment records.

   8. Third-Party Correspondence: If possible, reach out to third parties that may have visibility into the transactions, such as logistics or consulting companies involved.

   Each of these procedures should be evaluated based on the specific circumstances and the materiality of the accounts involved. Collaborating with your Audit team will help ensure the chosen alternative procedure suffices for your audit objectives.

   Best,
   [Your Name]

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