Which of the following is not a substantive audit procedure for leases?
A)Obtain and read copies of lease agreements and develop a schedule of leases.
B)Review relevant expense accounts and determine if there are entries related to leases.
C)For all operating leases,determine that the client has recorded assets and lease obligations properly.
D)Review the client's disclosure of lease obligations for compliance with GAAP.

Question

Quizplus · Accepted Answer

For operating leases, under most accounting standards including International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles (GAAP), lessees do not record assets and lease obligations on the balance sheet in the same way as for finance leases. Therefore, determining that the client has recorded assets and lease obligations properly for all operating leases is not applicable as a substantive audit procedure for leases.

Which of the Following Is Not a Substantive Audit Procedure