The auditor recalculates approximate interest expense, using overall monthly installments payable and average interest rates, to test for:
A) omitted loans payable.
B) misstatement of interest expense.
C) both A and B
D) none of the above

Question

Quizplus · Accepted Answer

The auditor's recalculation of interest expense can help identify both omitted loans payable (A) and misstatements of interest expense (B) by ensuring that the recorded interest aligns with the expected amounts based on known loans and interest rates.

The Auditor Recalculates Approximate Interest Expense, Using Overall Monthly Installments