The auditor recalculates approximate interest expense, using overall monthly instalments 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

Recalculating interest expense helps in identifying both omitted loans payable (by revealing discrepancies in expected interest payments) and misstatements in the recorded interest expense, ensuring the accuracy of financial statements.

The Auditor Recalculates Approximate Interest Expense, Using Overall Monthly Instalments