Which of the following controls will most likely justify a reduced assessed level ofcontrol risk for the completeness assertion for notes payable?(1) The accounting staff reviews board of director minutes for any indication ofany transactions involving outstanding debt to make sure all borrowings areincluded in the general ledger.(2) All borrowings that exceed $500,000 require approval from the board ofdirectors before loan contracts can be finalized.(3) Before approving disbursement of principal payments on notes payable, thetreasurer reviews terms in the note.(4) Accounting maintains a detailed schedule of outstanding note payable that isreconciled monthly to the general ledger.
Which of the following controls will most likely justify a reduced assessed level of
control risk for the completeness assertion for notes payable?
(1) The accounting staff reviews board of director minutes for any indication of
any transactions involving outstanding debt to make sure all borrowings are
included in the general ledger.
(2) All borrowings that exceed $500,000 require approval from the board of
directors before loan contracts can be finalized.
(3) Before approving disbursement of principal payments on notes payable, the
treasurer reviews terms in the note.
(4) Accounting maintains a detailed schedule of outstanding note payable that is
reconciled monthly to the general ledger.
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