Question 2 (8 points) SUBSTANTIVE AUDIT PROCEDURES FOR A LOAN AGREEMENT 8 marks REQUIRED: [Note: do NOT include any Testing of Controls] For the purposes of Substantive Testing provide 4 (four) substantive audit procedures in examining the loan. Your answer muse include what evidence would you select for each procedure. SITUATION: You work for the auditing firm of Bhatt and Candusso. You have been engaged to audit the financial statements of Da Silva Corporation for the year ended December 31, 2020. During the year, Da Silva secured a $1,000,000 loan from the Durham Bank of Canada in order to meet some cash flow needs. Under the terms of the loan, Da Silva must repay $200,000 plus interest each December 31 starting in the year 2021 and ending in the year 2025. The Current Ratio of Da Silva, on its annual financial statements, must not fall below 1.5:1 Da Silva gives you access to the following audit evidence: Board of Directors minutes The actual agreement with the bank, including relevant dates of the repayments and the signatures of Da Silva's senior officers EN : You work for the auditing firm of Bhatt and Candusso. You have been engaged to audit the financial statements of Da Silva Corporation for the year ended December 31, 2020. During the year, Da Silva secured a $1,000,000 loan from the Durham Bank of Canada in order to meet some cash flow needs. Under the terms of the loan, Da Silva must repay $200,000 plus interest each December 31 starting in the year 2021 and ending in the year 2025. The Current Ratio of Da Silva, on its annual financial statements, must not fall below 1.5:1 Da Silva gives you access to the following audit evidence: - Board of Directors minutes - The actual agreement with the bank, including relevant dates of the repayments and the signatures of Da Silva's senior officers - Accounting records that include Da Silva's bank account records and cash receipts book - Accounting records that include Da Silva's journalized interest expense and working papers supporting the calculation. e Paragraph BIU ... 0 EN C Question 2 (8 points) SUBSTANTIVE AUDIT PROCEDURES FOR A LOAN AGREEMENT 8 marks REQUIRED: [Note: do NOT include any Testing of Controls] For the purposes of Substantive Testing provide 4 (four) substantive audit procedures in examining the loan. Your answer muse include what evidence would you select for each procedure. SITUATION: You work for the auditing firm of Bhatt and Candusso. You have been engaged to audit the financial statements of Da Silva Corporation for the year ended December 31, 2020. During the year, Da Silva secured a $1,000,000 loan from the Durham Bank of Canada in order to meet some cash flow needs. Under the terms of the loan, Da Silva must repay $200,000 plus interest each December 31 starting in the year 2021 and ending in the year 2025. The Current Ratio of Da Silva, on its annual financial statements, must not fall below 1.5:1 Da Silva gives you access to the following audit evidence: Board of Directors minutes The actual agreement with the bank, including relevant dates of the repayments and the signatures of Da Silva's senior officers EN : You work for the auditing firm of Bhatt and Candusso. You have been engaged to audit the financial statements of Da Silva Corporation for the year ended December 31, 2020. During the year, Da Silva secured a $1,000,000 loan from the Durham Bank of Canada in order to meet some cash flow needs. Under the terms of the loan, Da Silva must repay $200,000 plus interest each December 31 starting in the year 2021 and ending in the year 2025. The Current Ratio of Da Silva, on its annual financial statements, must not fall below 1.5:1 Da Silva gives you access to the following audit evidence: - Board of Directors minutes - The actual agreement with the bank, including relevant dates of the repayments and the signatures of Da Silva's senior officers - Accounting records that include Da Silva's bank account records and cash receipts book - Accounting records that include Da Silva's journalized interest expense and working papers supporting the calculation. e Paragraph BIU ... 0 EN C
