When reading the corporate minutes,the auditor obtained information regarding loans that were authorized for borrowing.What audit step would the auditor likely conduct with this information?
A)trace the authorized amounts to the bank statements
B)verify that notes payable have been recorded
C)calculate interest payable as of the end of the year
D)contact a credit rating agency to determine the rating of the lender

Question

Quizplus · Accepted Answer

Verifying that notes payable have been recorded is a direct way to ensure that the loans authorized for borrowing, as noted in the corporate minutes, have been properly accounted for in the financial records. This step ensures that the company's liabilities are accurately reflected.

When Reading the Corporate Minutes,the Auditor Obtained Information Regarding Loans