Professional Documents
Culture Documents
McGraw-Hill/Irwin
debt
15-2
Financing cycle
Activities
Primary
concern
15-3
2.
3.
15-4
Inherent Risk
Similar
15-5
Authorization
15-6
Internal Control
Questions
15-7
Audit Documentation
Copy
Confirm interest-bearing
debt
Bearing Debt
(2
of 6)
15-10
Vouch borrowing
and repayment
transactions
Bearing
Debt (3
of 6)
15-11
Test computations
of interest
interest
Bearing
Debtexpense,
(4 of 6)
payable, and amortization of discount and premium
Evaluate compliance with debt provisions
15-12
15-14
15-15
Time of examination
Small
number of entries
End of the year often wait until after
balance sheet date for many procedures
15-16
accounts
Retained earnings
Prior period adjustments
15-17
2.
3.
15-18
authorization of transactions by
board of directors an corporate officers
Segregation of duties in handling
transactions
Maintenance of adequate records
15-19
Internal Control
Capital Stock (2 of 2)
Audit Documentation
Lead
15-21
Permanent File
Examine
Understanding of Internal
Control
Obtain
an understanding of internal
control over capital stock transactions
15-24
15-25
Retained Earnings
Analysis
Dividends
Determine
15-27
Presentation
Complete
Title
Par or stated value
Dividend rate
Conversion and call provisions
Number of shares authorized, issued and in treasury
Dividends in arrears
Shares reserved for stock options or conversions
15-28
Time of examination
Few
15-29
Partnerships
Partnership
contract
15-30
Sole Proprietorship
Capital
accounts
Net income
Withdrawals
Capital investments and additions traced to
the cash and asset records
Ensure segregation of personal transactions
from business
15-31