Non-current Liabilities (1)

Question 1

What do non-current liabilities include

Answer 1

Bank loan
Debentures
Other loans repayable more than one year after date

Question 2

What will auditors try to determine?

Answer 2

Completeness
Accuracy
Classification

Question 3

What is completeness?

Answer 3

Whether all non-current liabilities have been disclosed

Question 4

What is accuracy?

Answer 4

Whether interest payable has been calculated correctly and included in the correct accounting period

Question 5

What is classification?

Answer 5

Whether long-term loans and interest have been correctly disclosed in the FSs

Question 6

What is existence?

Answer 6

Obtain direct confirmation from banks and other lenders of the amounts outstanding, accrued interest and what security they hold

Question 7

What is rights and obligations?

Answer 7

Review direct confirmation letters from lenders

Question 8

What is classification and presentation (draft accounts liabilities repayment loan)

Answer 8

Review draft accounts and agree that liabilities are correctly classified as current/non-current by reference to repayment dates in loan agreements

Question 9

What is classification and presentation (disclosures standards checklist)

Answer 9

Ensures disclosures are correct and in line with accounting standards by comparing disclosure to required disclosure per an accounting disclosure checklist