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

Major Topics:

  • Typical 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
  • Proper form of noncompliance waiver letters
  • Impact of noncompliance on disclosures

Learning Objectives

  • Discover and discuss typical audit risks and special audit considerations related to various liabilities.
  • Recognize and tailor the audit plan in response to assessed risk of material misstatement, focusing on the assertions with typically higher risk.
  • Explore and evaluate results from a search for unrecorded liabilities and procedures to assess the propriety of accrued estimates.
  • Discover and evaluate the completeness, classification, and disclosure of financing arrangements – including debt covenant compliance.
Last updated/reviewed: May 12, 2021

Included In Certifications

This course is included in the following Certification Programs:

13 CoursesAudit Training Level 2 - Experienced Staff

  1. Fraud Risk - Complying with Minimum Audit Requirements
  2. Best Practices for Identifying and Evaluating Audit Risk - Linking Risk to the Detailed Audit Plan
  3. Testing Internal Controls - Exploring Strategies for Verifying Operating Effectiveness
  4. Inquiry and Research - Improving Critical Audit Skills
  5. Auditing Investments - Understanding Risks and Procedures for the Most Common Investments
  6. Auditing Accounts Receivable - Focusing Procedures for Testing Existence and Valuation
  7. Auditing Liabilities, Including Long-Term Debt - Addressing the Risks of Completeness, Classification, and Disclosure
  8. Substantive Analytic Procedures - Strengthening Evidence to Satisfy Audit Objectives
  9. Sampling - Avoiding Common Mistakes on Financial Statement and Compliance Audits
  10. Desired Traits of a Star Performer - Visualizing How to Become an Exceptional Staff Auditor
  11. Professional Requirements for Assurance Providers, Including Independence - Understanding Critical Code of Professional Conduct Concepts
  12. Accounting Update - Hot Topics for Preparing Current Period Financial Statements
  13. Auditing & Attest Update - Hot Topics for Current Period Audits and Other Attest Services

Prerequisites

Course Complexity: Foundational

No advanced preparation or prerequisites are required for this course.
Designed For: Accountants responsible for auditing accounts payable, accrued expenses and debt.

Education Provider Information

Company:
Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact:
For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Course Syllabus
INTRODUCTION AND OVERVIEW
  5:57Learning Objectives and Introduction to Auditing Liabilities, Including Long-Term Debt
  10:38Typical Audit Procedures
  14:46Search for Unrecorded Liabilities
  10:34Auditing Accrued Liabilities
  8:51Loss Contingencies
  16:11Key Controls and Overview of Debt Audit Procedures
  3:32Due on Demand and Subjective Acceleration Causes
  8:06ST Obligations Expected to be Refinanced
  3:34Revolving Credit Arrangements
  9:02Focus on Debt Modification, Extinguishments and Troubled Debt Restructurings
  11:38Focus on Debt Covenants
CONTINUOUS PLAY
  1:42:49Auditing Liabilities, Including Long-Term Debt
SUPPORTING MATERIAL
  PDFSlides: Auditing Liabilities, Including Long-Term Debt
  PDFAuditing Liabilities, Including Long-Term Debt Glossary/ Index
REVIEW AND TEST
  quizREVIEW QUESTIONS
 examFINAL EXAM