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Auditing Debt and Equity  The following is attached to the company's financial statements, pay attention to the non current liabilities and shareholders’ equity sections. Questions: a. Based on the financial statements above, explain possible “debt to equity swap” scheme  carried out by the client!  b. What evidence do you need to collect to ensure that the client's debt to equity swap is  free from material misstatement?

Auditing Debt and Equity  The following is attached to the company's financial statements, pay attention to the non current liabilities and shareholders’ equity sections. Questions: a. Based on the financial statements above, explain possible “debt to equity swap” scheme  carried out by the client!  b. What evidence do you need to collect to ensure that the client's debt to equity swap is  free from material misstatement?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Auditing Debt and Equity 
The following is attached to the company's financial statements, pay attention to the non current liabilities and shareholders’ equity sections.

Questions:
a. Based on the financial statements above, explain possible “debt to equity swap” scheme 
carried out by the client! 
b. What evidence do you need to collect to ensure that the client's debt to equity swap is 
free from material misstatement? 

Catatan/ 2010 Notes 2009 LIABILITIES AND SHAREHOLDERS' EQUITY KEWAJIBAN DAN EKUITAS KEWAJIBAN LANCAR Pinjaman bank jangka pendek Hutang usaha - Pihak ketiga Hutang pajak Hutang lain-lain Biaya masih harus dibayar Uang muka penjualan Bagian kewajiban jangka panjang yang jatuh tempo dalam waktu satu tahun CURRENT LIABILITIES Short-term bank loans 63.218.778.659 2b,h,m,q,10,24 59.461.174.390 16.049.325.984 2b,i,m,q,11,24 11.810.234.601 76.862.642 44.048.187 Trade payables - Third parties Taxes payable Other payables Accrued expenses Advance on sales 3.289.221.216 2n,20b 1.322.870.535 896.800.000 12 1.259.063.830 2b,9 153.161.300 2b,h,m,q,13,24 Current maturities of long-term debts 9.120.148.381 Jumlah Kewajiban Lancar 84.930.157.694 81.771.532.031 Total Current Liabilities KEWAJIBAN TIDAK LANCAR Kewajiban jangka panjang - setelah dikurangi bagian yang jatuh tempo dalam waktu satu tahun Kewajiban pajak tangguhan - Bersih Kewajiban diestimasi imbalan pasca-kerja NON-CURRENT LIABILITIES Long-term debts - net of current maturities 128.338.374 2b,h,m,q,13,24 45.066.961.090 2n,20d 18.457.040.328 18.329.375.900 Deferred tax liabilities - Net Estimated liabilities for post-employment benefits 1.975.245.056 2j,22 1.588.160.200 Jumlah Kewajiban Tidak Lancar 20.560.623.758 64.984.497.190 Total Non-Current Liabilities Jumlah Kewajiban 105.490.781.452 146.756.029.221 Total Liabilities EKUITAS Modal saham - nilai nominal Rp 100 per saham Modal dasar - 4.000.000.000 saham Modal ditempatkan dan disetor penuh - 1.500.000.000 saham (2009: 1.300.000.000 saham) Tambahan modal disetor - Bersih Saldo laba SHAREHOLDERS' EQUITY Share capital - par value Rp 100 per share Authorized - 4,00ỏ,000,000 shares Issued and fully paid - 1,500,000,000 shares (2009: 1,300,000,000 shares) Additional paid-in capital - Net Retained earnings 150.000.000.000 33.542.841.148 130.000.000.000 4.367.923.968 21.257.157.437 14 2k, 15 45.916.926.397 Jumlah Ekuitas 229.459.767.545 155.625.081.405 Total Shareholders' Equity JUMLAH KEWAJIBAN DAN EKUITAS TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 334.950.548.997 302.381.110.626
Transcribed Image Text:Catatan/ 2010 Notes 2009 LIABILITIES AND SHAREHOLDERS' EQUITY KEWAJIBAN DAN EKUITAS KEWAJIBAN LANCAR Pinjaman bank jangka pendek Hutang usaha - Pihak ketiga Hutang pajak Hutang lain-lain Biaya masih harus dibayar Uang muka penjualan Bagian kewajiban jangka panjang yang jatuh tempo dalam waktu satu tahun CURRENT LIABILITIES Short-term bank loans 63.218.778.659 2b,h,m,q,10,24 59.461.174.390 16.049.325.984 2b,i,m,q,11,24 11.810.234.601 76.862.642 44.048.187 Trade payables - Third parties Taxes payable Other payables Accrued expenses Advance on sales 3.289.221.216 2n,20b 1.322.870.535 896.800.000 12 1.259.063.830 2b,9 153.161.300 2b,h,m,q,13,24 Current maturities of long-term debts 9.120.148.381 Jumlah Kewajiban Lancar 84.930.157.694 81.771.532.031 Total Current Liabilities KEWAJIBAN TIDAK LANCAR Kewajiban jangka panjang - setelah dikurangi bagian yang jatuh tempo dalam waktu satu tahun Kewajiban pajak tangguhan - Bersih Kewajiban diestimasi imbalan pasca-kerja NON-CURRENT LIABILITIES Long-term debts - net of current maturities 128.338.374 2b,h,m,q,13,24 45.066.961.090 2n,20d 18.457.040.328 18.329.375.900 Deferred tax liabilities - Net Estimated liabilities for post-employment benefits 1.975.245.056 2j,22 1.588.160.200 Jumlah Kewajiban Tidak Lancar 20.560.623.758 64.984.497.190 Total Non-Current Liabilities Jumlah Kewajiban 105.490.781.452 146.756.029.221 Total Liabilities EKUITAS Modal saham - nilai nominal Rp 100 per saham Modal dasar - 4.000.000.000 saham Modal ditempatkan dan disetor penuh - 1.500.000.000 saham (2009: 1.300.000.000 saham) Tambahan modal disetor - Bersih Saldo laba SHAREHOLDERS' EQUITY Share capital - par value Rp 100 per share Authorized - 4,00ỏ,000,000 shares Issued and fully paid - 1,500,000,000 shares (2009: 1,300,000,000 shares) Additional paid-in capital - Net Retained earnings 150.000.000.000 33.542.841.148 130.000.000.000 4.367.923.968 21.257.157.437 14 2k, 15 45.916.926.397 Jumlah Ekuitas 229.459.767.545 155.625.081.405 Total Shareholders' Equity JUMLAH KEWAJIBAN DAN EKUITAS TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 334.950.548.997 302.381.110.626
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