Which of the following procedures is a typical substantive procedure related to the relevant assertion of valuation and allocation for debt?
A)Determine the related parties resulting from debt transactions.
B)Reviewing debt agreements for the restrictive covenants.
C)Recalculating accrued interest.
D)Confirming debt with relevant outside parties.

Question

Quizplus · Accepted Answer

Recalculating accrued interest is a substantive procedure related to the relevant assertion of valuation and allocation for debt as it ensures that the interest accruals on the debt have been correctly calculated and allocated. It helps to assess the accuracy of the carrying value of the debt. The other options, such as determining related parties resulting from debt transactions, reviewing debt agreements for restrictive covenants, and confirming debt with relevant outside parties are procedures related to the completeness, existence, and rights and obligations assertions, respectively.

Which of the Following Procedures Is a Typical Substantive Procedure