Which of the following would the auditor consider as part of the control environment related to debt?
A)Inquiry of trustee regarding the registration of current bondholders and distribution of interest payments.
B)Recalculation of the underwriter's commission.
C)Independence of the board of directors with respect to long-term financing.
D)Inspection of documentation to confirm refinancing of debt.

Question

Quizplus · Accepted Answer

Independence of the board of directors with respect to long-term financing is a key element of the control environment related to debt. This ensures that the decision-making process related to long-term financing is free from any bias and influence from stakeholders or management. Choices A, B, and D are not related to the control environment of debt.

Which of the Following Would the Auditor Consider as Part