Page 56 - eBook Audit Of Financial Statement Components

CHAPTER 6: AUDITING PROCEDURES ON

NON-CURRENT LIABILITIES

Noncurrent liabilities, also known as long-term liabilities, are

obligations listed on the balance sheet not due for more than a
year. Examples of noncurrent liabilities include long-term loans

and lease obligations, bonds payable and deferred revenue.

Non-current liabilities are usually authorised by the board and

should be well documented. Auditors will primarily try and
determine:

i. Completeness:

- whether all non-current liabilities have been disclosed

ii. Accuracy:

- whether interest payable has been calculated correctly and

included in the correct accounting period

iii. Classification and understandability:

- whether long-term loans and interest have been correctly
disclosed in the financial statements

A copy of the

loan or
This section will focus on audit of loans. The audit objective on
relevant
agreements loans is to ensure that loans are properly recorded, represent

should be valid claims and are properly disclosed in the financial
obtained and
statements.
filed in the

auditor’s

permanent

file for

reference.

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