In testing acquisitions the auditor needs to understand the appropriate accounting guidance related to acquisition accounting. Which of the following is NOT an accounting consideration for the auditor as regards to acquisition cost?

The audit of the acquisition and payment cycle involves: - Identifying business functions, transactions, accounts affected, and documents and records - Identifying potential misstatements in acquisition and payment transactions - Assessing control risk and designing tests of controls and substantive tests of transactions for acquisitions and payments  Auditors test a company's internal controls, which are the steps that a company has in place to reduce the possibility of theft, fraud, or mistakes. Auditors will pull a sample of financial transactions and review them for mistakes or signs... Show more

The audit of the acquisition and payment cycle involves:
- Identifying business functions, transactions, accounts affected, and documents and records
- Identifying potential misstatements in acquisition and payment transactions
- Assessing control risk and designing tests of controls and substantive tests of transactions for acquisitions and payments 

Auditors test a company's internal controls, which are the steps that a company has in place to reduce the possibility of theft, fraud, or mistakes. Auditors will pull a sample of financial transactions and review them for mistakes or signs of fraud. 

Some other tests in the acquisition and payment cycle include:
Tests to uncover unrecorded accounts payable: Also known as "the search for unrecorded accounts payable"
Attribute sampling: Commonly used when testing the acquisitions and cash disbursement cycle
Vouching: The process of checking the validity of transactions, which ensures the accuracy of the financial statements 

In auditing, verification is the process of confirming the existence, ownership, valuation, and possession of assets and liabilities in the balance sheet. It's performed at the end of the accounting period. 

Verification can be done onsite or offsite:
Onsite verification: The auditor visits the facility to learn about it.
Offsite verification: The auditor checks documents, official records, photos, and interviews staff. 

Here are some steps for verifying book debts:
Verify book debts using the books of accounts.
Support the book debts with sale documents.
Send book balances to debtors for confirmation.
Verify ownership of book debts with the sales documents and the sales ledger.
Debtors should ask about any disputes with customers about discount, claim, etc.. 

Auditors can also verify account balances or records by vouching (or comparing) them to third-party documentation. For example, an auditor might verify the existence of a machine on a company's fixed asset register by reviewing the invoice from the seller.

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