Substantive analytical procedures for long-term debt include:
A) recalculating interest expense based on overall terms of debt.
B) comparing interest expense with prior year amount.
C) calculate times interest earned ratio.
D) All of the above.

Question

Quizplus · Accepted Answer

All of the listed substantive analytical procedures are relevant and useful in the audit of long-term debt. Recalculating interest expense based on the overall terms of debt would help in ensuring that the interest rates and other terms of the debt have been correctly recorded. Comparing interest expense with prior year amount would help in identifying any significant fluctuations or unexpected changes in the interest expense. Calculating the times interest earned ratio would help in assessing the borrower's ability to meet interest payments when they become due.

Substantive Analytical Procedures for Long-Term Debt Include