The audit objective to determine that notes payable in the schedule exist is verified by the tests of balances procedure to

Question

Quizplus · Accepted Answer

Confirming notes payable with the lender or holder of the notes is the most appropriate way to verify the existence of the notes on the schedule. Footing the list of notes payable would only ensure the accuracy of the addition of the schedule, recalculating interest expense would test completeness and accuracy, and examining the balance sheet for proper disclosure would test disclosure and classification.

The Audit Objective to Determine That Notes Payable in the Schedule