Audit

. . . . More info Requirement a. State the purpose of each of the five audit procedures listed. Select the corresponding letter from the list below that best explains the purpose of each audit procedure. (Click the icon to view the purpose of the audit procedures.) To ensure that the bonds are not subject to unnecessary early retirement by bondholders and that proper disclosures are made. To ensure that bonds payable are not paid more than once. Purpose of To determine the nature of restrictions on client as a means of verifying whether the audit Audit procedures restrictions have been met and to ensure they are adequately disclosed. procedures To determine if the account balances are reasonable as related to each other and to Analyze the general ledger account for bonds payable, interest expense, and unamortized bond examine for unreasonable changes in the account balances. 1. discount or premium. To ensure that the fair value of the bonds are properly stated, 2. Obtain a confirmation from the bondholder. To determine if the calculations are correct and accounts are accurate. To that the fair value of the assets guaranteed are properly stated. 3. Obtain a copy of the bond indenture agreement and review its important provisions. To obtain independent confirmation of bond indebtedness and collateral 4. Determine that each of the bond indenture provisions has been met. Test the client's calculations of interest expense, unamortized bond discount or premium, accrued 5. interest, and bonds payable. Print Done