Knowing how to audit accounts payable is mostly knowing what to sample and why, because the population is large and testing all of it is neither possible nor useful. The structure is consistent: establish that the balance is complete, then that what is in it is real and authorised, then that it is correctly stated at the period end. Within each, a small sample chosen deliberately tells you far more than a large one chosen randomly, because payables errors cluster in predictable places. This page is the sequence, the sampling decisions that matter, and how to record what you did so the work is worth something later.
Choose the sample where errors cluster
Round-number invoices, invoices just under an approval threshold, new suppliers, invoices with no purchase order, and anything paid outside a normal payment run. Random sampling is statistically respectable and finds less; targeted sampling finds the things worth finding.
Test completeness with the after-date payments review
Take payments made in the weeks after the period end and ask which relate to the period. This is the core completeness procedure and it is where understatement shows up. 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. and anything unapproved at that moment belongs in the assessment.
Document what you did, not just what you found
What you sampled, why, what you checked and what you concluded. A finding with no method behind it cannot be relied on next year, and the point of doing this yourself is that it compounds. Next year's review starts from this year's notes, and that is what turns an afternoon into a control rather than an event.
Questions people ask about how to audit accounts payable
How large should the sample be?
Large enough that you would be surprised to have missed a systematic problem, which in a small business is usually twenty to thirty targeted items rather than a statistical sample.
Should we test payments as well as invoices?
Yes, and separately. An invoice can be perfect and the payment still go to the wrong bank account, which is the risk the supplier-details check addresses.
Is a self-audit a substitute for an external one?
No, and it is not meant to be. It is assurance for the owners and preparation for whatever external work follows.