The primary reason for preparing a reconciliation between interest-bearing obligations outstanding during the year and interest expense in the financial statements is toa. Evaluate internal control over securities.b. Determine the validity of prepaid interest expense.c. Ascertain the reasonableness of imputed interest.d. Detect unrecorded liabilities.

Q: Give examples of substantive proceduresin the finance and investment cycleand relate them to…

A: Finance and Investment Cycle: The cycle consists majorly of the activities that are concerned with…

Q: In connection with the audit of an issue of long-term bonds payable, the audit team shoulda.…

A: Auditing:   In auditing, auditors verify the correctness and fair presentation of financial…

Q: Which of the following statements concerning receivables is correct? Notes receivable are often…

A: Receivable means, money not received yet. Note receivable is a written note promise to pay a certain…

Q: In the audit of notes payable, which balance-related audit objective is generally oneof the most…

A: Notes payable (NP): Notes payable is an obligation which arises on a debt agreement between a…

Q: If receivables are hypothecated against borrowings, the amount of receivables involved should be…

A: Receivables are the amount due to be received from other parties. These can be internal parties or…

Q: Choose the correct. On a statement of financial affairs, how are liabilities classified?a. Current…

A: Statement of affairs: It refers to a statement of the assets and liabilities of a company. A…

Q: What is meant by “accounting symmetry” between the entries recorded by the debtor and creditor in a…

A: Accounting summary:

Q: Describe how short-term investments are reported in the balance sheet and account fortransactions…

A: Introduction: Short-term investments are those financial instruments which has a duration of less…

Q: From the following statements, identify the statement/s that will not participate in the audit of an…

A: Bank Reconciliation Statement The purpose of preparing the bank reconciliation statement to know the…

Q: in relation to receivables, an entity is required by PFRSs to a. All of these b. disclose any…

A: Solution: In relation to receivables, an entity is required by PFRSs to: 1. Disclose any receivables…

Q: Changes in accounting policy are Permitted if the change will result in a more reliable and more…

A: Change in accounting policy refers to change in the method of accounting principles or rules…

Q: Which of the following audit objectives is to validate the assertion of existence? *   A. All…

A: Financial statement assertions, also known as management assertions, are a company's official…

Q: How do auditors interact with third parties to gain audit evidence when auditing debt and equity?…

A: Introduction: An auditor is someone who is authorized to review and verify the accuracy of bank…

Q: Liabilities are obligations of a company to creditor. Select one: True False

A: Liabilities are obligations of a company to creditor. Answer: False Explanation: A liability is a…

Q: In what respects is a review of interim financial information similar to a review of the unaudited…

A: Interim Financial Statement: It is a financial statement that covers the financial information of a…

Q: The negotiable certificate of deposits issued by banks will lock in the following EXCEPT *…

A: A negotiable certificate of deposit often known as a jumbo CD, is a CD having a minimum face value…

Q: In relation to receivables, an entity is required.by PFRSS to O All of these. Classify receivables…

A: Accounts Receivables - Accounts Receivable is represented as the amount due to the company on…

Q: Which of the following best describes the application ofgenerally accepted accounting principles to…

A: Accounting principles: These are the assumption, concepts, and guidelines necessary to prepare and…

Q: With respect to Long-Term Debt, please describe the tests of controls and substantive procedures…

A: Auditors primary responsibility is to form an opinion on financial statements. To form an opinion on…

Q: A deposit premium can be defined as The initial payment schedule required to institute a premium…

A: An insurance contract is a contract where the insured pays the insurer premiums for coverage…

Q: A debt amortization schedule prepared for each debt and equity is considered a good control. O True…

A: Debt Amortization Schedule: A loan amortisation schedule is a comprehensive table of periodic loan…

Q: An auditor must identify the relevant assertions about each significant financial statement account…

A: a.

Q: Which of the following shall an entity disclose for loans payable recognized at the end of the…

A: Disclosures about conditions that existed at the end of the reporting period should be updated in…

Q: Which of the following is true when accounts receivable are factored without recourse? a. The…

A: Accounts receivable factoring without recourse means that the factoring company is not retaining…

Q: determine its proper allowance for loan losses

A: Option a is wrong because by making visits to the business sites, auditor cannot help in determining…

Q: When bonds and other debt securities are issued, payments such as legal costs, printing costs, and…

A: The correct answer is Option (d).

Q: On a statement of financial affairs, how are liabilities classified?a. Current and noncurrent.b.…

A: Statement of affairs: It refers to a statement of the assets and liabilities of a company. A…

Q: To determine that all transactions relating to long-term debts are properly recorded, the auditor…

A: Long-Term Debt: Long-term liabilities, often known as long-term debts, are obligations owed by a…

Q: An auditor's primary substantive procedures for investments typically include inspection of…

A: Answer: As per Q/A guidelines, first question has been answered. Assertions are the basic terms that…

Q: List the audit objectives for substantive tests of interest-bearing debt.   b. List seven…

A: The audit objectives for substantive tests of Interest Bearing Debt are as under :  Assess the…

Q: Estimated liabilities are disclosed in financial statements by Note to the financial statements. An…

A: Estimated Liability: Because the services or commodities have been received, an estimated liability…

Q: Auditing Debt and Equity  The following is attached to the company's financial statements, pay…

A: Introduction:- A debt/equity swap is a refinancing deal in which a debt holder gets an equity…

Q: How shall an entity subsequently measure financial liabilities?  Is IFRS measurement of financial…

A: Financial liabilities can be measured at amortized cost by using effective interest method and it…

Q: The classification and therefore subsequent measurement of financial assets depends on.? Select one:…

A: Hi student Since there are multiple questions, we will answer only first question.

Q: The treasury department maintains the custody over the company's investments. Both the accounting…

A: Answer:-  Reconciliation :- Reconciliation is a procedure where two sets of records are compare with…

Q: Following are typical questions that might appear on an internal control questionnaire for…

A: Internal controls are defined as the procedures, mechanisms and rules executed through company in…

Q: Financial Statement Focuses on accounting for liabilities and non-owner financing. Consider how…

A: The study of accounting is based on some fundamental accounting principles, concepts or conventions.…

Q: The following are disclosed when there are related party transactions during the periods covered by…

A: Hi student Since there are multiple questions, we will answer only first question.  Full disclosure…

Q: ____________ to a Notes Payable or a Mortgages Payable account generally represent payments in full…

A: Notes payable: It is a liability account wherein the borrower writes a promissory note to the lender…

Q: In performing risk assessment procedures for investments, an auditor may inquire of the client…

A: Risk Management: Risk assessment is a term used to describe the overall process or method where you:…

Q: Which of the following audit objectives is to validate the assertion of occurrence? *   A. All…

A: This question deals with the audit assertion. As per occurrence assertion, all the items that are…

Q: How to make observations about the content of notes to the financial statements?

A: Budget summary notes are the supplemental notes that are incorporated with the distributed fiscal…

Q: Directions: Please select the appropriate answer on the statement below; B - If the statement is…

A: First Reporting Standard is International Accounting Standards (IAS 1): Presentation of Financial…

Q: Advanced collections from customers prior to the performance obligation being satisfied is accounted…

A: 1) Advanced collections from customers prior to the performance obligation being satisfied is…

Q: ou are required to identify and give reasons for the appropriate classification of the debt…

A: Debt instrument can be defined as the financial instrument which acts as a tool for the business…

Audit Procedures

Audit Procedures are methods and techniques performed by the auditor to determine the quality of financial information of clients, thereby expressing an opinion on true & fair view of financial statements and entity position. They are identified and applied at the planning stage of audit after determining audit objectives, scope, approach, and risk assessment.