An audit of accounts payable costs whatever reconstruction it requires. That is the practical insight most small finance teams reach eventually, usually after a year in which the request list arrived and everything on it had to be assembled from scratch. The alternative is not more work; it is the same work done as a by-product of the close, kept as records attached to the month. Four things account for most of what will be asked, and each of them is something you should have produced anyway. This page is the four, why each is asked for, and the difference it makes to have them waiting.
The aging at the cut-off, saved rather than regenerated
Regenerating an aging months later gives you today's data arranged as though it were then, which is not the same document and an auditor knows it. Saving the aging as it stood at each period end costs one action a month. On the worked example on this site, $48,000 current, $21,000 at thirty days, $9,500 at sixty and $4,200 beyond is $82,700 owed, 42% of it overdue.
The list of what was unapproved at cut-off
This is the raw material of the search for unrecorded liabilities, and it is the single most useful thing you can hand over. It also happens to be the list that makes your accruals deliberate rather than discovered.
An approval sample, and the reconciliation
Approvals recorded against invoices make the sample a query rather than a search. The payables reconciliation, with each difference explained, is the evidence that the balance on the statements is real. Both are close-time outputs, not audit-time ones.
Questions people ask about audit of accounts payable
When should we start preparing?
You do not, if the four above are kept monthly. Preparation as an activity is what happens when they are not.
What if we cannot produce an approval trail?
Say so early rather than assembling something after the fact. An auditor can extend other procedures; discovering a reconstructed trail is a considerably worse conversation.
Does a small company audit look at payables in detail?
It depends on materiality and on your controls. Payables usually gets attention because understatement is the easy error, which is why completeness testing is the part to expect.