## Completeness Assertion: Verifying Trade Payables and Liabilities
The completeness assertion ensures that all liabilities that should have been recorded are recognized in the financial statements. For trade payables, understatement is the primary risk, so procedures focus on detecting unrecorded liabilities.
### 1. Cut-Off Procedures
- For the last 5 invoices received/recorded at the reporting date: verify that goods were received and risk/rewards of ownership transferred to the entity before year-end.
- All goods received prior to year-end must be recorded as purchases and included in trade creditors.
### 2. Substantive Testing of Purchases
- Test purchases/expenses on a sample basis selected from accounts payable ledgers.
- Check supporting documents to verify correct amounts and dates.
### 3. Match Invoice Dates to Gate Entry Dates
- Match purchase invoice dates to gate entry (inward) dates to confirm correct accounting period recognition.
- Examine invoices received after the year-end to identify any that relate to the audit period but were not recorded.
### 4. Review of Subsequent Expense Vouchers
- Review all material expense vouchers recorded post balance sheet date to see if they relate to transactions within the audit period.
### 5. Advances Received from Customers
- Obtain a customer-wise listing with ageing and nature of advances.
- Enquire about disputes and whether additional liabilities exist.
- Verify underlying documentation supporting each advance received.
### 6. Statutory Dues Reasonability
Prepare reasonability analyses for TDS payable, GST payable, Professional Tax, PF, ESI, etc.
| Statutory Liability | Reasonability Approach |
|---|---|
| GST payable | Apply applicable rate to sales; compare to recorded GST liability |
| PF payable | Apply applicable rate to employee benefit expense; compare to recorded PF liability |
- Obtain and verify challans for deposits made post period-end against the balance sheet liability.
- Document explanations for any variance between amounts deposited and the recorded liability.
- Prepare a complete list of all statutory dues and consider CARO 2020 reporting obligations.