The confirmation of an account payable balance selected from the general ledger provides primary evidence regarding which management assertion?

Question

BlackTom AI · Accepted Answer

A confirmation from a supplier is direct external evidence that a recorded payable actually exists on the balance sheet at the assertion date.

1) Relevant knowledge points and concepts
- Audit assertions for account balances: existence (recorded liabilities actually exist), completeness (all liabilities that should be recorded are recorded), valuation/allocation (amounts are stated at appropriate amounts), rights and obligations (entity has obligations to pay), and presentation/disclosure.
- External confirmations are a form of audit evidence obtained directly from a third party and are generally strong evidence about whether recorded items are real.

2) Step-by-step reasoning
- Step 1: The auditor selects an accounts payable balance from the general ledger and sends a confirmation to the supplier asking the supplier to confirm the amount the client owes as of a specific date.
- Step 2: If the supplier replies confirming the balance (or provides details that agree with the ledger), that directly corroborates that the liability recorded by management actually exists and is owed by the client.
- Step 3: Because the evidence originates from an independent external source (the supplier), it reduces the risk that the recorded payable is fictitious or overstated.

3) Intermediate logic and evidence quality
- External confirmation -> independent corroboration of recorded balance -> supports existence (and to a lesser extent obligation).
- Confirmation is more persuasive for existence than internal documents because of independence.

4) Why the correct answer is correct
- The existence assertion concerns whether recorded payables are real. A supplier’s confirmation provides primary, persuasive evidence that the payable recorded in the ledger corresponds to an actual obligation to that supplier.

5) Why other assertions are less supported by confirmations
- Completeness: confirmations are not the most effective test for unrecorded liabilities; procedures like tracing subsequent cash disbursements or searching unmatched receiving reports are better.
- Valuation/allocation: confirmations usually state gross amounts and do not address valuation adjustments, currency remeasurement, or allowances.
- Rights and obligations: confirmations corroborate obligation but are secondary to existence as the main focus.
- Presentation/disclosure: confirmations don’t test adequacy of disclosures.

Conclusion: Therefore, a confirmation of an accounts payable balance primarily provides evidence about the Existence assertion, which matches the provided correct answer.

The confirmation of an account payable balance selected from the general ledger provides primary evidence regarding which management assertion?单项选择题

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