What is one of the mostproductive way of auditing interest expense recorded?
So as to verfiy the reasonableness of interest expense recorded, we applied the following formula:
Principal x Average Interest Rate x Period = Interest Expense
Many of the auditor would execute vouching to bank assistance by tracing the amount of money reflected on bank assistance to total stated on General Ledger. On the other hand, vouching only assure the existence, it will not address completeness.
Because of this, reasonableness is generally valuable to verify for the completeness of expenditures recorded.
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