But there's 12 months of expense, so it's ok.
The best way to test accounts payable for understatement is subsequent disbursement testing - select payments made after the date of the financial statements. (Some people prefer confirming accounts payable but I find that to be ineffective.) Look at the supporting documentation and see whether it should be in accounts payable at the balance sheet date. If it should be and is included in payables, then great. If it should be and it isn't, that's a problem, especially if it's material. Let's assume it's recurring monthly expenses - say utilities. I'm auditing 2020. It's a ready-mixed concrete company, and the plan uses a lot of electricity and water. I'm performing subsequent disbursement testing and select the electric and water bills paid on January 25. I get copies of the bills, and they cover the entire month of December. I check to see if they are in accounts payable, and they aren't. The two bills amount to $60,000. Materiality is $35,000. Probl...