L18 Notes 6 - How do we learn of these restrictions? review...

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Audit of Notes Payable A. Interest Expense quick method of calculation B. What is the advantage of auditing Notes Payable, interest expense, and interest payable simultaneously? C. Unrecorded N|P, derivatives How do you find them? analyze interest expense, perform cutoff tests inquire with past creditors, review last years WP, inquire of client, perform analytical review D. Restrictions on Loans How do they arise and provide examples (financial ratios, dividend payments, new loans, operations)
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Unformatted text preview: How do we learn of these restrictions? review loan agreements, correspondence, confirmation with creditor. E. Disclosure of general collateral, terms, restrictive covenants and compensating balances. F. What statistical approach is most appropriate? 100% G. Audit Program for N|P a (easy audit) confirm w/ bank verify computations and postings b. (difficult audit) search for unrecorded liabilities in addition...
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