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I have identified the following proceduresir and would like to ask for your insight
-agree the lender’s name to the list of dentures
What I don’t understand is ,is just referring to the client’s debenture list enough? Does the auditor needs to test the controls over the entity ‘s debenture listing before relying on it ?It’s not enough:
There would be a debenture agreement that would need to be inspected (security, term, interest rate).
Ensure the debenture is still a long-term liabiliity and hasn’t become a current liability
Inspect bank account to see interest being paid.
Perhaps write to the lender to get confirmation of the amount outstanding.
Look for interest paid soon after yeat end to test for completeness.
Refer to in letter or representation
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