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How to test for cutoff expenses?

Cutoff relates to whether the transaction is recorded in the proper accounting period. The audit team should select expenses or purchase transactions around the cutoff date and evaluate whether the transaction was recorded in the proper period based on the invoice date.

For example, if the cutoff date is December 31, then the audit team would select transactions from the last few days in the current year (December 29 to December 31) and a few days of the next year (January 1 to January 3rd).


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