4.

Auditors must evaluate whether debt provisions have been met as one of the audit procedures for long-term debt. The bond indenture of the debt issue should be carefully studied.

a. List five items that are commonly found in a bond indenture that the auditor needs to consider. b. List three tests that auditors might use to evaluate whether the company is in compliance with the stipulated conditions. c. What must the auditor do if they find that the company has not complied fully with the requirements?