Actual interest expense is significantly higher than the auditor's estimate. This would most likely lead the auditor to conclude that the client has not
A) recorded all long-term interest-bearing debt in the accounting records.
B) recorded all interest expense paid or accrued.
C) properly accounted for the discount of bonds payable account.
D) properly recorded interest income.

Question

Quizplus · Accepted Answer

If the actual interest expense is significantly higher than the auditor's estimate, it may indicate that the client has not recorded all long-term interest-bearing debt, as this would result in additional interest expense that was not accounted for in the auditor's estimate.

Actual Interest Expense Is Significantly Higher Than the Auditor's Estimate