A consumer electronics company is considering acquiring a small flash memory manufacturer. An internal auditor has been assigned to determine if the manufacturer's accounts payable contain all outstanding liabilities. Which audit procedure is not relevant for this objective?
To determine if the manufacturer's accounts payable contain all outstanding liabilities, the focus is on the completeness of the accounts payable. This involves ensuring that all liabilities are recorded. Verifying a sample of accounts payable against related invoices, receiving reports, and purchase orders (option D) checks for the existence and accuracy of accounts payable, but does not ensure that all liabilities are included. The other procedures (options A, B, and C) directly address completeness by checking whether all liabilities have been recorded in the accounts payable.
Why not option B to confirm balances owed?
Because it says the confirmations will be done only to the select vendors (vendors they normally do business with)not all. Hence, this won't determine if the AP contains all the outstanding debts.
We are looking for completeness (means tracing=Source documents to FS record) and D is the only one that relates to existence/occurrence assertion (FS record to source document=vouching)
Clearing the objective of question as a whole.