Page 57 - eBook Audit Of Financial Statement Components

Audit of Loans

Audit Assertion Audit Procedures

Rights/Obligations Obtain a list of outstanding loans, hire-
purchase (HP) and lease balances or other

credit facilities, where relevant.
Review management and board minutes
for approval to take up the loans or credit
facilities.

Completeness Obtain a direct confirmation for loans or
credit facilities outstanding with the
financial institutions.

Minutes of meetings
and resolutions of Existence Review the loan agreements to ensure
the board of compliance with the terms and conditions
directors and/or about repayments and interest servicing.

shareholders should
document the Occurrence Check drawdown of loans during the
approvals of the period, if the loans are released based on
periodic intervals instead of in a lump sum.
credit facilities
taken and the terms

and conditions Accuracy Check calculation of interest expenses,
concerned. where appropriate.

Classification Ensure proper disclosure of the loans and
credit facilities in the financial statements.

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