.

1. AUDIT PROGRAMME
TRADE PAYABLES
Name of Client Sheridan AV
Year-end 31 March 2021
Name of Auditor (s) Ailyn C. Ruaya
Trade payables are the amounts the company owes its suppliers for the
provision of goods and services. Trade payables are shown as current
liabilities. . Substantive testing should be carried out at year end on the
Statement of Financial Position to gain evidence regarding the following
assertions:
 Presentation and disclosure
 Accuracy classification and valuation
 Rights and Obligations
 Completeness and cut off
 Existence or Occurrence
The following substantive tests were carried out on the trade payables showing
on the Statement of Financial Position (see attached)
Audit
Assertion
Audit
objective
Test(s) to be
carried out
Details of testing Date
and
signat
ure
Presentati
on and
Disclosure
Trade
payables are
properly
identified
and
classified in
the financial
statements
Disclosures
relating to
trade
payables
are
adequate
Perform analytical
procedures:
Calculate ratios
Analyse ratio
results
Check opening
balances to
previous years
accounts to
ensure properly
brought forward
It indicates that the
company’s payable
ratio is equal to 1.84
after measuring the
ratio. This implies
that the business
has plenty of cash
available to pay its
loans out of the
current asset within
one year or to pay
off its short-term
debt in a timely
manner.
9,17,2x

2. Obtain a list of
trade payables
balances. Check
a sample to
underlying
records.
Test the list adds
up. Agree the list
to the control
account and to
the financial
statements
Compare
statement
presentation with
applicable
accounting
standards to
determine that
trade payables
are properly
identified and
classified in
financial
statements
Determine
appropriateness
of any disclosures
relating to trade
payables
Accuracy,
classificati
on and
valuation
Rights and
Obligation
s
Trade
payables are
stated at
correct
amount
owed
Trade
payables are
liabilities of
Vouch a sample
of trade payables
to supporting
documentation as
follows:
Vouch from list of
trade payables to
suppliers’
invoices, goods
received notes
and purchase
orders or other
It is noticed that the
trade payables are
reported at the
correct amount
owed after
confirming the
correct steps.
It is stated that the
liabilities borne by
the Company at the
date of the financial
position Statement
9,17,2x

3. the entity at
the date of
the
Statement of
Financial
Position
supporting
documentation to
ensure recorded
at correct amount
owed.
are trade payables
or monetary
obligations.
Completen
ess and
Cut off
Trade
payables
include all
amounts
owed by the
entity to
suppliers of
goods and
services at
the
Statement of
Financial
Position date
All trade
payables are
recorded in
the correct
accounting
period
Perform a search
for unrecorded
liabilities by:
Analytical review
Discussion with
management on
steps they have
taken to ascertain
all liabilities
recorded
Select a sample
of recorded
purchase
transactions from
several days
before and after
year-end and
examine
supporting
suppliers invoices
and goods
received notes to
determine that
purchases were
recorded in the
correct period
Observe the
number of the last
goods received
note issued on the
last business day
of the audit period
and trace a
sample of lower
and higher
numbered goods
received notes to
related purchase
After all trade
payables have been
checked, it is known
that all trade
payables and other
supporting
documentation are
correctly registered.
This ensures that in
the proper
accounting period,
the transactions and
creditors balances
are reported
properly and
accurately.
9,17,2x

4. documents to
determine
whether
transactions were
recorded in the
proper period
Identify any
amounts on
ageing report that
are overdue their
invoiced terms
and investigate
any reasons with
Sheridan AV.
Enquire if there
are any late
payment charges.
Existence
or
Occurrenc
e
Recorded
trade
payables
represent
amount
owed by the
entity at the
date of the
financial
statements
Perform a
payables
circularisation if
necessary (see
attached sheet)
After the amounts of
the sales invoices
and the debtors’
subsidiary ledgers
have been checked
and compared, it is
known that the
amount reported by
Rama Home in the
ledger does not
equate to or equal to
the amount reported
in the invoice.
Therefore, unless
the amount reported
is inaccurate or in
dispute, the auditor
must conduct a
payable
circularization or
negative circulation.
9,17,2x

5. From the audit work carried out I confirm that there are misstatement and
incorrect amount presented of the trade payables. Please examine the
presented data below and compare them to your records. Thus, in my view, the
trade payables are not reasonably specified.
Signed
AIlYN C. RUAYA
Auditor

6. September 17, 202x
Sheridan AV
This request is sent to you to allow our independent auditors to confirm that our
record is accurate.
This is to inform you that on the Rama Home Sales Invoice, our records on
February 05, 2021 showed a sum of ⁇ 156,720.00.If this record is the same
with your records on that date please confirm by signing and returning this form
directly to our auditors. For this aim, an addressed envelope is enclosed.If you
notice any discrepancy with the space given below, please report the
information directly to our auditor!
Yours Faithfully,
Ailyn C. Ruaya
********
Surigao City
The above amount is correct/ incorrect for the following reasons ________.
Yours Faithfully,
________________
Sheridan AV

7. HOW TO CARRY OUT A TRADE PAYABLES CIRCULARISATION
1 Select a sample of accounts for confirmation from a complete list of
suppliers
2 Confirm with client the payables you wish to circularise. Obtain
explanations where the client does not want you to circularise.
3 Send the confirmation requests. Enclose a prepaid envelope for
return to the firm. Ensure that the reply part of the letter is properly
referenced.
4 Record replies on a control sheet
5 Where replies are not received within a reasonable period send a
follow-up letter
6 Follow alternative procedures for any accounts which have an
unfavourable response or for which no response has been obtained.
7 Summarise the results and consider whether audit evidence has been
obtained for trade payables.