Auditing Liabilities, Including Long-Term Debt – Addressing the Risks of Completeness, Classification, and Disclosure

Learning Objectives

• To discuss typical audit risks and special audit considerations related to various liabilities.
• To recognize and tailor the audit plan in response to the assessed risk of material misstatement, focusing on the assertions with typically higher risk.
• To evaluate results from a search for unrecorded liabilities and procedures to assess the propriety of accrued estimates.
• To identify the completeness, classification, and disclosure of financing arrangements – including debt covenant compliance.

Course Description

Accounts payable is the aggregate amount of an entity’s short-term obligations to pay suppliers for goods and services purchased on credit. Accrued liabilities are recorded via journal entry and are based on the gradual accumulation of a liability over time.

This CPE course clarifies for the auditor every action needed to audit liabilities. It describes the characteristics of liabilities from an auditing perspective and then goes on to describe the steps required to audit many types of liabilities, including accounts payable, accrued liabilities, and debt. 

The completeness and proper classification of liabilities are the typical higher audit risks. The complexity of the debt financing arrangements may create a significant risk requiring special audit consideration.

Following are the major topics covered in this CPE Auditing webinar are:

• Audit procedures related to accounts payable and accrued expenses, including the search for   unrecorded liabilities
• Key controls related to liabilities
• Auditing long-term debt, including compliance with covenants
• Determining the proper classification of financing arrangements
• The proper form of noncompliance waiver letters
• Impact of noncompliance on disclosures

This online CPE webinar will discuss tips and techniques for auditing accounts payable, accrued expenses, and common long-term financing arrangements and related debt covenants.

Here is the link to your interests: Accounting & Auditing CPE Courses | CPE Courses for Certified Internal Auditors. 

Overview

• Accounts payable defined

  3 mins
• Search for unrecorded liabilities

  19 mins
• Example substantive analyticals

  35 mins
• Loss contingency accounting

  45 mins
• Why debt classification key?

  59 mins
• Determining substantial modification

  78 mins
• Example debt waiver request

  97 mins