The audit objective to determine that loans payable in the schedule exist is verified by the tests of balances procedure to:
A) recalculate interest expense.
B) foot the loans payable list.
C) examine duplicate copy of loans for authorisation.
D) examine the balance sheet for proper disclosure of noncurrent portions.

Question

Quizplus · Accepted Answer

Examining the duplicate copy of loans for authorisation ensures that the loans payable in the schedule are legitimate and exist. Recalculating interest expense, footing the loans payable list, and examining the balance sheet for proper disclosure of noncurrent portions do not provide direct evidence that loans payable in the schedule exist.

The Audit Objective to Determine That Loans Payable in the Schedule