The accounts payable clerk at Hyde Ltd. has been away sick for most of the last three months. During this time, the remaining staff in the accounts department has tried to cover for his absence, as well as continuing to do their own jobs. As a result of this disruption, the audit manager has assessed control risk as high for accounts payable and has adopted a predominantly substantive approach. He has decided to do extensive subsequent payments testing and cut-off testing.
Required
(a)Which assertions are most at risk for accounts payable at Hyde Ltd.? Explain.
(b) What is "subsequent payments" testing? How would you select the transactions to examine?
(c) How does cut-off testing differ from subsequent payments testing?