Exhibit 7-3 from your textbook (Turner) is reproduced below.It shows a sample audit program for 'notes payable and related accounts'. (Note:the brackets contain the management assertions being addressed by that audit procedure)

Procedure:

1.Obtain written confirmation from financial institutions regarding the amount of borrowings at year end. (Existence, Obligations, Valuation)

2.Obtain copies of each loan agreement and:

Note the interest rate and interest payment dates. Determine that interest

expense and interest payable are recorded in the proper amounts and in

the proper period. (Valuation and Allocation, Cutoff)

Note the principal payment dates. Determine that the current and

noncurrent classifications are computed correctly. (Classification)

Note the existence of any restrictions placed on the company by this

agreement.Determine whether the company is in compliance with all

such restrictions. (Presentation)

3.Examine cancelled cheques for any principal payments made during the period. (Valuation)

4.Review the minutes of the board of directors meetings to determine whether additional borrowing arrangements exist. (Completeness)

5.Inquire of management as to the existence of additional borrowing

arrangements. (Completeness)

Required:

Assume an audit client has a A$45M liability of 'notes payable' on their Balance Sheet (split between current and noncurrent liabilities).You are performing a financial statement audit and your client has provided you with a (download) file from the AIS with all the details for this and related accounts.The account balance consists of approximately 1,400 separate 'notes', with balances ranging from A$10,000 to A$200,000.You have access to generalised audit software (GAS) which is compatible with the download file.

Briefly discuss how you could use this GAS to assist with the audit tests for 'notes payable and related accounts' as specified in Exhibit 7-3.