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If there was a loan for 10 years the audit risk can be incorrect classification between current and non currentl iability right..
What can be the auditors response >
but if we look at the loan documentation , we will know that its for 10 years and should be a non current classification which is already known to us right >
I don’t know what your point is. The loan documentation will tell you when the loan has to be repaid and this will determine whether the loan should be classified as a current or long-term liability. Compare that to what the client has done.
If the client has got it right – end of story
If they haven’t ask them to change the FS
If they won’t change the FS consider modifying the audit opinion.
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