An Audit Procedure That Is Part of the Audit of Notes

question 3

Multiple Choice

An audit procedure that is part of the audit of notes payable is the review of the permanent audit working paper files to determine if there are restrictions on the payment of dividends in bond indenture agreements or preferred share provisions.Which presentation and disclosure audit assertion is this associated with?

• A)valuation
• B)completeness
• C)existence
• D)classification

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Definitions:

Spot Rates

The current market price of a financial instrument, commodity, or currency for immediate delivery and payment.

Absolute Purchasing Power Parity

A theory that states that exchange rates between currencies are in equilibrium when their purchasing power is the same in each of the two countries.

Trading Barriers

Restrictions or laws that limit the ability to trade goods, services, or financial instruments across borders or within markets.

Absolute Purchasing Power Parity

A theory that asserts that in the absence of market frictions, identical goods in different countries should have identical prices when expressed in a common currency.