Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Chapter 1, Problem 17DQP
a.
To determine
Provide the reason for charging low interest rate on loan with review report than that off loan with no review report and also explain for charging a low interest rate on the loan that requires audit report
b.
To determine
Compute the annual cost of Company M under each loan agreement and also state whether Company M should keep its existing loan or accept the offer provided by the Bank S or Bank F.
c.
To determine
State whether Company M should keep its existing loan or accept the offer provided by the Bank S or accept the offer provided by the Bank F.
d.
To determine
Explain whether Company M will desire to do audit by ignoring the potential reduction in interest cost.
e.
To determine
Explain the way strategic understanding of the client business has the possibility of increasing audit service.
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You were assigned to audit the borrowings of your client, Benedict Company, as of and for the year ended December 31, 2022. Upon examining their records, and inquiry wit management, you have found out that the company has the following notes outstanding as of December 31, 2022:
A 10% note issued to Supreme Inc. in exchange for a second-hand delivery vehicle on June 30, 2022. The face amount of the note is P800,000 and is due on June 30, 2027. Interest is payable semi-annually every June 30 and December 31. On the date of issuance, the delivery vehicle does not have a reliable fair market value, and the annual prevailing market rate of interest at that time for notes with similar characteristics is 12%.
A three-year 12% note issued to Ace Company with principal amount of P1,500,000 dated November 30, 2021. The principal is payable in three installments of P500,000 plus interest on outstanding balance every November 30, beginning on November 30, 2022. The note was issued in exchange for…
Chapter 1 Solutions
Auditing And Assurance Services
Ch. 1 - What are the information and established criteria...Ch. 1 - Prob. 2RQCh. 1 - Discuss changes in accounting and business...Ch. 1 - Prob. 4RQCh. 1 - Identify the three main ways information risk can...Ch. 1 - Prob. 6RQCh. 1 - Prob. 7RQCh. 1 - Prob. 8RQCh. 1 - Prob. 9RQCh. 1 - Prob. 10RQ
Ch. 1 - Prob. 11RQCh. 1 - Prob. 12RQCh. 1 - Prob. 13.1MCQCh. 1 - Prob. 13.2MCQCh. 1 - Prob. 13.3MCQCh. 1 - Prob. 14.1MCQCh. 1 - Prob. 14.2MCQCh. 1 - Prob. 14.3MCQCh. 1 - Prob. 15.1MCQCh. 1 - Prob. 15.2MCQCh. 1 - Prob. 15.3MCQCh. 1 - Prob. 16DQPCh. 1 - Prob. 17DQPCh. 1 - Prob. 18DQPCh. 1 - Prob. 19DQPCh. 1 - Prob. 20DQPCh. 1 - Prob. 21DQPCh. 1 - Prob. 22DQPCh. 1 - Prob. 23DQPCh. 1 - As discussed in the chapter opening vignette and...Ch. 1 - Prob. 25DQP
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