Non-Current Liabilities Flashcards
1
Q
What are the key assertions?
A
Completeness.
2
Q
What are the sources of evidence?
A
- Bank Confirmation Letter
- Loan Agreement
- Cash Book
- Bank Statement
3
Q
What can you do with the loan agreement?
A
- Obtain a breakdown of all loans outstanding at the year end then agree to the financial statements - completeness.
- Inspect the loan agreement for restrictive covenants and determine the effect and likelihood of any breaches - classification & presentation.
4
Q
What can you do with the bank confirmation letter?
A
- Agree the balance outstanding to the bank confirmation letter - valuation, rights & obligations.
- Inspect the bank confirmation letters for any loans that have not been included in the financial statements - completeness.
- Inspect the bank confirmation letters for details of security over assets and agree to disclosures in the financial statements - presentation.
5
Q
What can you recalculate?
A
- Recalculate the split between current and non-current liabilities - classification & presentation.
- Recalculate the interest charge and interest accrual - accuracy & completeness.
6
Q
What can you do with the cash book?
A
Inspect the cash book for loan repayments made - existence, accuracy & valuation.
