审计学：一种整合方法 阿伦斯 英文版 第12版 课后答案 Chapter
22 Solutions
Manual
-CAL-FENGHAI-(2020YEAR-YICAI)_JINGBIAN
Chapter 22
Audit of the Capital Acquisition and Repayment Cycle
Review Questions
22-1 Four examples of interest bearing liability accounts commonly found on balance sheets are: 1. Notes payable 2. Contracts payable 3. Mortgages payable 4. Bonds payable
These liabilities have the following characteristics in common: 1. Relatively few transactions affect the account balance, but each
transaction is often highly material in amount.
2. The exclusion of a single transaction could be material in itself. 3. There is a legal relationship between the client entity and the holder of
the stock, bond, or similar ownership document.
4. There is a direct relationship between interest and dividend accounts and
debt and equity.
These liabilities differ in what they represent and the nature of their respective liabilities.
22-2 The characteristics of the liability accounts in the capital acquisition and repayment cycle that result in a different auditing approach than the approach followed in the audit of accounts payable are: 1. Relatively few transactions affect the account balance, but each
transaction is often highly material in amount.
2. The exclusion of a single transaction could be material in itself. 3. There is a legal relationship between the client entity and the holder of
the stock, bond, or similar ownership document.
4. There is a direct relationship between interest and dividend accounts and
debt and equity.
2
22-3 It is common to audit the balance in notes payable in conjunction with the audit of interest expense and interest payable because it minimizes the verification time and reduces the likelihood of overlooking misstatements in the balance. Once the auditor is satisfied with the balance in notes payable and the related interest rates and due dates for each note, it is easy to test the accuracy of accrued interest. If the interest expense for the year is also tested at the same time, the likelihood of omitting a note from notes payable for which interest has been paid is minimized. When there are a large number of notes or a large number of transactions during the year, it is usually too time consuming to
completely tie out interest expense as a part of the audit of the notes payable and related accrued interest. Normally, however, there are only a few notes and few transactions during the year.
22-4 The most important controls the auditor should be concerned about in the audit of notes payable are: 1. The proper authorization for the issuance of new notes (or renewals) to
insure that the company is not being committed to debt arrangements that are not authorized.
2. Controls over the repayment of principal and interest to insure that the
proper amounts are paid.
3. Proper records and procedures to insure that all amounts in all
transactions are properly recorded.
4. Periodic independent verification to insure that all the controls over
notes payable are working.
22-5 The most important analytical procedures used to verify notes payable is a test of interest expense. By the use of this test, auditors can uncover misstatements in interest calculations or possible unrecorded notes payable.
22-6 It is more important to search for unrecorded notes payable than unrecorded notes receivable because the omission of an asset is less likely to occur than the omission of a debt. Several audit procedures the auditor can use to uncover unrecorded notes payable are: 1. Examine the notes paid after year-end to determine whether they were
liabilities at the balance sheet date.
2. Obtain a standard bank confirmation that includes specific reference to
the existence of notes payable from all banks with which the client does business.
3. Review the bank reconciliation for new notes credited directly to the
bank account by the bank.
4. Obtain confirmation from creditors who have held notes from the client
in the past and are not currently included in the notes payable schedule.
5. Analyze interest expense to uncover a payment to a creditor who is not
included on the notes payable schedule.
3
审计学：一种整合方法阿伦斯英文版第12版课后答案chapter22solutionsmanual
