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  • 7B Notes Payables

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    Crest Tine
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    This document outlines substantive audit procedures for notes payable. It suggests confirming notes with lenders to verify principal amounts, interest rates, payment terms, and collateral. It also recommends reconciling interest expense to notes payable, reading loan agreements to check for proper disclosure of terms, recalculating amounts due and interest to check valuation, and reviewing financial statements for correct classification and disclosure of notes payable according to accounting standards.

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    7B-Notes-Payables

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    This document outlines substantive audit procedures for notes payable. It suggests confirming notes with lenders to verify principal amounts, interest rates, payment terms, and collateral. It also recommends reconciling interest expense to notes payable, reading loan agreements to check for proper disclosure of terms, recalculating amounts due and interest to check valuation, and reviewing financial statements for correct classification and disclosure of notes payable according to accounting standards.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    8 views2 pages

    7B Notes Payables

    Uploaded by

    Crest Tine
    This document outlines substantive audit procedures for notes payable. It suggests confirming notes with lenders to verify principal amounts, interest rates, payment terms, and collateral. It also recommends reconciling interest expense to notes payable, reading loan agreements to check for proper disclosure of terms, recalculating amounts due and interest to check valuation, and reviewing financial statements for correct classification and disclosure of notes payable according to accounting standards.

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    © All Rights Reserved
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    of 2

    NOTES PAYABLE

    ASSERTIONS Substantive Audit Procedures

    Existence/ 1. Confirm notes with lenders, including the principal amount, interest rate,
    Occurrence interest payments, due date, collateral, and other terms.

    Recorded notes payable actually 2. Determine whether proceeds of notes are recorded and used as the BODs
    exist. intended.

    3. Perform analytical procedures.

    Completeness 4. Reconcile interest expense to notes payable and compare interest expense
    for the current period with that for the previous year.
    All notes payable are recorded.
    5. Review standard bank confirmations to determine that all loans are
    recorded.

    Rights 6. Read the loan agreement for terms and conditions that should be disclosed
    and for pledging of assets.
    & obligations

    Recorded notes payable represent


    obligations of the entity.

    Valuation/ 7. Recalculate the portion of notes currently due, interest expense, interest
    payments and accrued payments; foot the schedule of notes payable.
    Measurement
    Notes payable are valued properly.

    Presentation 8. Review the FS and perform analytical procedures to determine whether


    accounts are classified and disclosed in accordance with PFRS.
    & disclosure
    Notes payable are recorded to
    result in presentation and
    disclosure in accordance with
    PFRS.

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