During the year under audit,a company has completed a private placement of a substantial amount of bonds.Which of the following is the most important step in the auditor's program for the audit of bonds payable?

Question

Quizplus · Accepted Answer

Tracing the cash received from the issue to the accounting records is the most important step as it ensures that the bond proceeds have been properly recorded in the accounting system. This step also helps to ensure that there are no material misstatements or discrepancies in the company's financial statements related to the bond issuance. The other three options are also important in the audit of bonds payable, but they are not as critical as tracing the cash received.

During the Year Under Audit,a Company Has Completed a Private