The auditor's program to examine interest-bearing debt most likely will include steps that require:

Question

Quizplus · Accepted Answer

Vouching borrowing and repayment transactions is a common step in examining interest-bearing debt. This involves verifying the accuracy and completeness of the debt recorded by the entity by examining documentation that supports borrowing transactions, such as loan agreements, and repayment transactions, such as bank statements. This helps to ensure that the debt is properly recorded in the financial statements and is accurately reflected in the amounts owed to creditors. Comparing the book value of the debt to its year-end market value and verifying the proper presentation of the debt through confirmation may also be relevant steps, but they are not typically included in the auditor's program to examine interest-bearing debt. Inspecting the accounts payable subsidiary ledger for unrecorded interest-bearing debt is not a relevant step, as accounts payable typically relates to non-interest-bearing liabilities.

The Auditor's Program to Examine Interest-Bearing Debt Most Likely Will