What it is
Liabilities are tested mainly for completeness, because the risk is understatement. The core evidence is a search for unrecorded liabilities, cutoff testing and a careful look at accruals and estimates.
This program covers the AP subledger, vendor statement reconciliations, confirmations where used, accrued expenses, estimates under AU-C 540 and related party items.
When to use it
- Planning the liabilities section of an audit.
- When expenses are understated for earnings management, covenant or tax reasons, or when cutoff errors are likely.
- Alongside the search for unrecorded liabilities workpaper.
What’s inside
- Subledger-to-GL tie-out and analytics on payables, purchases and days payable
- Vendor statement reconciliations and confirmations
- Search for unrecorded liabilities and purchase cutoff
- Accruals: bonuses, vacation, professional fees, utilities, warranty and litigation
- Debit balances, related parties and presentation
Standard cited
This template follows AU-C 330 / AU-C 505. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use. See AU-C 330 explained, AU-C 505 explained.
Questions
Why is completeness the main assertion for payables?
The usual misstatement is a liability that was left out, which flatters expenses and the balance sheet. So the evidence should come from outside the AP listing, such as post year-end disbursements and unpaid invoices, rather than only from the listing itself.
Should I confirm accounts payable?
Confirming payables is less common than confirming receivables because the vendor’s records do not prove completeness. It can still be useful for vendors with large purchases, low balances or disputes. Vendor statement reconciliations are often more productive.
Related templates
- Search for Unrecorded Liabilities Workpaper
- Subsequent Disbursements Testing Workpaper
- Accrued Expenses Schedule (Excel)
Last updated 11/04/2026. All free templates.