Auditing and Assurance Services 1st Edition by Iris Stuart

Exercise 2

Long-term debt. JPS has notes payable and bonds payable in its long-term debt accounts. It makes payments on notes each year and issues new debt when it needs moneys to expand the business.
a. Describe the risks associated with the audit of the long-term debt accounts for JPS at year-end.
b. What evidence should the auditors gather to determine that the Long-Term Debt account balances are not materially misstated at year-end
c. How should the Long-Term Debt accounts be valued at year-end How will the auditors determine that the accounts are properly valued at year-end