List two types of restrictions long-term creditors often put oncompanies when granting them a loan. How can the auditor find out about these restrictions?

Q: Loan structuring is the process of designing a loan to satisfy the financing demands of a business…

A:

Q: Ways that a lender may respond to a defaulted loan without resorting to foreclosure include all of…

A: ExplnationThe lender's response options to a defaulted loan often involve alternatives to…

Q: how to correct a Notification has been received that the outstanding balance on one of the debtors…

A: Introduction:   Rectification entry has to be passed when any error has been made in the books of…

Q: Analyze the risks associated with auditing accounts payable. Explain the process of auditing…

A: Auditing refers to the procedure of examining or investigation of the financial statements of the…

Q: In your own opinion, what would be the out come or consequences if a debtor failed to settle thier…

A: A debt default occurs when the borrower is unable to pay the money back to the lender at the time…

Q: What is a contingency? Why are contingencies important to users of financial statements? What are…

A: When there is a scenario in which the conclusion cannot be predicted and which must be handled in…

Q: Ways that a lender may respond to a defaulted loan without resorting to foreclosure include all of…

A: In the context of a lender's response to a defaulted loan, the options provided in the…

Q: What is meant by “accounting symmetry” between the entries recorded by the debtor and creditor in a…

A: Accounting summary:

Q: Unsecured creditors: have rights to be paid amounts owed, but the rights may have to be enforced…

A: Correct option is 1. i.e unsecured creditors have rights to be paid amounts owed, but the rights may…

Q: n the examination of interest-bearing debt, auditors identify audit objectives, and then determine…

A: Solution Audit is the  examination of the various books of accounts by the expert (auditor) to make…

Q: How would the transactions be reconciled if the allowance for bad debt is converted to a bad debt…

A: This question said that The company made the provision or provided for allowance for bad debt as per…

Q: How do auditors interact with third parties to gain audit evidence when auditing debt and equity?…

A: Introduction: An auditor is someone who is authorized to review and verify the accuracy of bank…

Q: Describe some of the motives and mistakes made by the mortgage securitizers?

A: To market as well as attract borrowers for lenders.Evaluation of the borrower's credit…

Q: (AACSB) Analysis Identify the categories used on a classified balance sheet to report assets and…

A: Introduction:- A classified balance sheet is a financial statement that reports a company's assets…

Q: A. The existence of loans. B. The completeness of loans. C. Related disclosures pertaining to…

A: Assertions are claims made by the management of the company which are further verified by the…

Q: Discuss the two methods for recording bad debt expense. What type of company uses each method?

A: Bad debt expense refers to the cost that a company has to incur for selling the goods on credit.…

Q: The purpose of a negative pledge on the borrower's assets in an unsecured bank loan agreement is to

A: Negative pledge is included in contracts to prevent the borrower from using their assets to obtain…

Q: What substantive analytical procedures might an auditor use to perform an analytical procedure for…

A: The accounts payable liability account in the company's financial statements represents the sum of…

Q: Identify two important pieces of information that should be included in the borrower's credit…

A: Credit is a two-party transaction in which one (the creditor or lender) exchanges money,…

Q: f the auditor want to assure that Receivables have not been sold. What assertion he or she want to…

A: Existence represents that whether accounts receivable of the company really exist on a particular…

Q: With respect to Long-Term Debt, please describe the tests of controls and substantive procedures…

A: Auditors primary responsibility is to form an opinion on financial statements. To form an opinion on…

Q: What is the formula used to determine the amount repayable to the lender under the Cash Back Option…

A: “Since you have posted multiple questions, we will provide the solution only to the first question…

Q: properly defaults and is under liquidation, can the creditors of the bank touch and receive the…

A: Answer: Concept: When the liquidation occurs in bank, there is preferential payment that are to be…

Q: During the review of loan contracts and agreements, the auditor would most likely figure out the…

A: Answer: The responsibility of auditor is to test the assertions with respect to the financials…

Q: o methods of accounting for bad debts? Wh

A: 1.The direct write-off method 2. allowance method.   In the direct write-off method, an allowance…

Q: RUE OR FLASE? The effect of a lender agreeing to give the borrowing entity a grace period within…

A: Non Current Liability are long term liabilities where their payment is due  12 months  after the…

Q: What are the general rules for measuring and recognizinggain or loss by both the debtor and the…

A: At the time when restructuring of a loan is taking place, the creditor must compute the loss…

Q: Describe some of the motives and mistakes made by the mortgageoriginators?

A: The mortgage broker did not fix a target. Without a clear aim for the year, couriers can transfer…

Q: List the audit objectives for substantive tests of interest-bearing debt.   b. List seven…

A: The audit objectives for substantive tests of Interest Bearing Debt are as under :  Assess the…

Q: What are the risks associated with auditing accounts payable? Can you explain the process of…

A: Introduction: Accounts payable (AP) is a general ledger account that represents a company's…

Q: Discuss the priorities among the various parties who may have competing interests in collateral and…

A: Debtor refers to the entity who is a legal entity and the one who owes a debt to another entity. And…

Q: What are the general rules for measuring gain or loss byboth creditor and debtor in a troubled-debt…

A: Rules for measuring gain or loss by creditor in a troubled-debt restructuring involving a…

Audit Procedures

Audit Procedures are methods and techniques performed by the auditor to determine the quality of financial information of clients, thereby expressing an opinion on true & fair view of financial statements and entity position. They are identified and applied at the planning stage of audit after determining audit objectives, scope, approach, and risk assessment.