Auditing and EthicsQuestion 5657 of 212
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6. Which of the procedures performed by CA F is suitable for satisfaction of concern regarding borrowing?

Options

AProcedure (i)
BProcedure (ii)
CProcedure (iii)
DProcedure (iv) (2 Marks)
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Correct Answer

Option DProcedure (iv) (2 Marks)

All Options:

  • AProcedure (i)
  • BProcedure (ii)
  • CProcedure (iii)
  • DProcedure (iv) (2 Marks)

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Detailed Solution & Explanation

To verify that borrowings on the balance sheet represent valid claims by banks or third parties, the auditor must check the existence and obligation assertions.
Agreeing the loan balance and loan payables to the loan agreement (Procedure iv) is the most suitable procedure to confirm that a valid contract exists and the recognized amount is in accordance with the terms of the agreement.
Hence, **Option D** is the correct answer.

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