Using substantive procedures to test debt obligations is most appropriate because there are a relatively large number of transactions involving immaterial dollar amounts.

Question

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Substantive procedures are typically used for material transactions or account balances, and debt obligations are often material in nature. Additionally, even though there may be a large number of transactions involving immaterial amounts, these transactions can still be tested through analytical procedures or other forms of substantive testing.

Using Substantive Procedures to Test Debt Obligations Is Most Appropriate