Reference no: EM132987186

Problem 1: In doing substantive testing of financial liability, the auditor should do the following, except:

a. Use the total materiality as benchmark for the substantive testing.

b. Set the materiality, total materiality and performance materiality.

c. Had the audit planning with the client to understand the company as a whole

d. None of the above

e. Perform a test of internal control for the financial liability to know the extent of the test.

Problem 2: In auditing long-term bonds payable, an auditor most likely will

a. Compare interest with the bond payable amount for reasonableness

b. Perform analytical procedures on the bond premium and discount accounts

c. Examine documentation of assets purchased with bond proceeds or liens

d. Confirm the existence of individual bondholders at year-end