In the audit of loans payable, which of the following audit procedure would be most likely performed to validate the existence assertion?
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In the audit of loans payable, which of the following
Choices
Sending loan confirmations
Vouching of subsequent payments of loans
Performing analytical procedures
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- In the audit of loans payable, which of the following audit procedure would be most likely performed to validate the existence assertion? Group of answer choices A. Vouching of subsequent payments of loans B. Sending loan confirmations C. Performing analytical procedures D. Review loan contractsdiscuss the process of auditing the following:• Revenue• Receivables• Expected Credit Loss (ECL)List two types of restrictions long-term creditors often put oncompanies when granting them a loan. How can the auditor find out about these restrictions?
- What relevant assertion should be used to record loans receivable net of an allowance for loan losses when allowance should adequately cover any estimated losses inherent in the loan portfolio but not excessive losses? a. Existence or occurrenceb. Valuation or allocationc. Cutoffd. Rights or obligationsWhich of the following audit procedures is least appropriate for addressing the assertion of valuation of liabilities? a. Confirm with creditors b. Test for unrecorded liabilities. c. Perform analytical procedures. d. Verify accounts payable trial balanceIn order to make sure that loans are properly classified, the auditor would: a. Examine due dates on duplicate copies of loan agreements to determine whether all or part are a non-current liability. b. Examine the loan agreements to determine whether the company has obligations for payment. c. Trace the totals on the loans list to the general ledger. d. Examine corporate minutes for loan approval.
- what is the best provisioning methodology in loan impairement and why?Auditors try to identify predictable relationships when using analytical procedures. Relationships involving transactions from which of the following accounts would most likely yield the highest level of evidence? a. Accounts receivable. O b. Interest expense. O c. Travel and entertainment expense. O d. Accounts payable.What substantive analytical procedures might an auditor use to perform an analytical procedure for accounts payable? Please provide reference(s).
- Auditors try to identify predictable relationships when using analytical procedures. Relationshiipss involvingtransactions fromwhich of the following accounts most likely would yield the highest level of evidence? a. accounts receivable b. interest expense c. accounts payable d. Travel and entertainment expenseWhich of the following will most likely provide the most assurance concerning theaccuracy balance-related objective for accounts receivable?(1) Vouch amounts in the subsidiary ledger to details on shipping documents.(2) Compare receivable turnover ratios with industry statistics for reasonableness.(3) Inquire about receivables pledged under loan agreements.(4) Assess the allowance for uncollectible accounts for reasonablenessFor each of the following accounts, give key risks, relevant assertions and how to test those assertions. Bank Payables Long-term liabilities Statement of profit or loss items
