Kế toán, kiểm toán - Chapter 15: Debt and equity capital

Debt and Equity CapitalChapter 1515-2Internal Control Over Interest-- Bearing DebtAuthorization by the board of directorsUse of an independent trusteeInterest Payments on Bonds and Notes Payable--Cash disbursement controls15-3Objectives for the Audit of Interest-Bearing DebtConsider inherent risks, including fraud risks.Consider internal control over interest-bearing debt.Determine the existence of recorded interest-bearing debt.Establish the completeness of recorded interest-bearing debt.Determine that the client has obligations to pay the recorded interest-bearing debt.Determine that the valuation of interest-bearing debt is in accordance with generally accepted accounting principles.Determine that the presentation and disclosure of interest-bearing debt are appropriate.15-4 Substantive Tests of Interest-  Bearing DebtObtain analyses of interest-bearing debt and related accountsExamine copies of notes payable and supporting documentsConfirm interest-bearing debtVouch borrowing and repayment transactionsPerform analytical proceduresTest computations of interest expense, interest payable, and amortization of discount and premiumEvaluate compliance with debt provisionsVerify authority for issuance of debt to corporate minutesReview notes payable paid or renewed after the balance sheet datePerform procedures to identify notes payable to related partiesSend confirmation letters about financing arrangementsEvaluate financial statement presentation and disclosure15-5Objectives for the Audit of Interest-Bearing DebtConsider inherent risks, including fraud risks.Consider internal control over owners’ equity.Determine the existence of recorded owners’ equity.Establish the completeness of recorded owners’ equity.Determine that the valuation of owners’ equity is in accordance with generally accepted accounting principles.Determine that the presentation and disclosure of owners’ equity are appropriate.15-6Internal Control—Capital StockBoard of director control of capital stock transactionsIndependent registrar and stock transfer agent (In smaller companies--control achieved by segregation of duties of authorization of transactions, custody of stock certificates, and recordkeeping)Stock certificate bookStockholders’ ledgerControl over dividend payment15-7Substantive Tests of Capital StockObtain analyses of capital stock accountsExamine articles of incorporation, bylaws, and minutesAccount for proceeds of stock issues Confirm shares outstandingReconcile shares outstanding with general ledgerDetermine the appropriate accounting is applied to employee stock compensation plansDetermine compliance with restrictions and preferences related to capital stock and disclosures are appropriate