Audit procedure is part of internal control performed by the auditor, to gather the possible document that helps the auditors to make a strong conclusion. The audit procedure helps to determine the nature of the financial information provided by the customers and all kinds of risks that occur in the financial statements. An analytical procedure is a part of audit procedure that evaluates the financial statement by comparing the financial data with the non-financial data. To describe: Reasons for auditors to generally follow the substantive strategy when audit the long term debt and capital account.

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Answer 1

Question

Chapter 15, Problem 15.1RQ

To determine

Concept Introduction:

Audit procedure is part of internal control performed by the auditor, to gather the possible document that helps the auditors to make a strong conclusion. The audit procedure helps to determine the nature of the financial information provided by the customers and all kinds of risks that occur in the financial statements. An analytical procedure is a part of audit procedure that evaluates the financial statement by comparing the financial data with the non-financial data.

To describe:Reasons for auditors to generally follow the substantive strategy when audit the long term debt and capital account.

Expert Solution & Answer

Explanation of Solution

A substantive strategy helps to identify the evidence related to a particular transaction, or it helps to collect the reasonable evidence for a specific assertion. While auditing the long term debt and capital account, the auditor follows the substantive strategy, because it is more efficient to use and provide an appropriate result.
The reliance strategy describes when the auditor depends on the test of control to perform the audit, and the auditor should have proper knowledge of tests of controls. The auditors would follow the reliance strategy when the organization continuously involved in the financing activities and performs tests of controls.

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Students have asked these similar questions

Eccles Inc., a zero-growth firm, has an expected EBIT of $100.000 and a corporate tax rate of 30%. Eccles uses $500,000 of 12.0% debt, and the cost of equity to an unlevered firm in the same risk class is 16.0%. If the effective personal tax rates on debt income and stock income are Td = 25% and TS = 20% respectively, what is the value of the firm according to the Miller model (Based on the same unlevered firm value in the earlier question)? a. $475,875 b. $536,921 c. $587,750 d. $623,050 e. $564,167

Refer to the data for Eccles Inc. earlier. If the effective personal tax rates on debt income and stock income are Td = 25% and TS = 20% respectively, what is the value of the firm according to the Miller model (Based on the same unlevered firm value in the earlier question)? a. $475,875 b. $536,921 c. $587,750 d. $623,050 O $564,167

Warren Supply Inc. wants to use debt and common equity for its capital budget of $800,000 in the coming year, but it will not issue any new common stock. It is forecasting an EPS of $3.00 on its 500,000 outstanding shares of stock and is committed to maintaining a $2.00 dividend per share. Given these constraints, what percentage of the capital budget must be financed with debt? a. 33.84% b. 37.50% c. 32.15% d. 30.54% e. 35.63%

Answer 2

Question

Chapter 15, Problem 15.1RQ

To determine

Concept Introduction:

Audit procedure is part of internal control performed by the auditor, to gather the possible document that helps the auditors to make a strong conclusion. The audit procedure helps to determine the nature of the financial information provided by the customers and all kinds of risks that occur in the financial statements. An analytical procedure is a part of audit procedure that evaluates the financial statement by comparing the financial data with the non-financial data.

To describe:Reasons for auditors to generally follow the substantive strategy when audit the long term debt and capital account.

Expert Solution & Answer

Explanation of Solution

A substantive strategy helps to identify the evidence related to a particular transaction, or it helps to collect the reasonable evidence for a specific assertion. While auditing the long term debt and capital account, the auditor follows the substantive strategy, because it is more efficient to use and provide an appropriate result.
The reliance strategy describes when the auditor depends on the test of control to perform the audit, and the auditor should have proper knowledge of tests of controls. The auditors would follow the reliance strategy when the organization continuously involved in the financing activities and performs tests of controls.

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Answer 3

Question

Chapter 15, Problem 15.1RQ

To determine

Concept Introduction:

Audit procedure is part of internal control performed by the auditor, to gather the possible document that helps the auditors to make a strong conclusion. The audit procedure helps to determine the nature of the financial information provided by the customers and all kinds of risks that occur in the financial statements. An analytical procedure is a part of audit procedure that evaluates the financial statement by comparing the financial data with the non-financial data.

To describe:Reasons for auditors to generally follow the substantive strategy when audit the long term debt and capital account.

Expert Solution & Answer

Explanation of Solution

A substantive strategy helps to identify the evidence related to a particular transaction, or it helps to collect the reasonable evidence for a specific assertion. While auditing the long term debt and capital account, the auditor follows the substantive strategy, because it is more efficient to use and provide an appropriate result.
The reliance strategy describes when the auditor depends on the test of control to perform the audit, and the auditor should have proper knowledge of tests of controls. The auditors would follow the reliance strategy when the organization continuously involved in the financing activities and performs tests of controls.

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Answer 4

Question

Chapter 15, Problem 15.1RQ

To determine

Concept Introduction:

Audit procedure is part of internal control performed by the auditor, to gather the possible document that helps the auditors to make a strong conclusion. The audit procedure helps to determine the nature of the financial information provided by the customers and all kinds of risks that occur in the financial statements. An analytical procedure is a part of audit procedure that evaluates the financial statement by comparing the financial data with the non-financial data.

To describe:Reasons for auditors to generally follow the substantive strategy when audit the long term debt and capital account.

Expert Solution & Answer

Explanation of Solution

A substantive strategy helps to identify the evidence related to a particular transaction, or it helps to collect the reasonable evidence for a specific assertion. While auditing the long term debt and capital account, the auditor follows the substantive strategy, because it is more efficient to use and provide an appropriate result.
The reliance strategy describes when the auditor depends on the test of control to perform the audit, and the auditor should have proper knowledge of tests of controls. The auditors would follow the reliance strategy when the organization continuously involved in the financing activities and performs tests of controls.

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Answer 5

Chapter 15, Problem 15.1RQ

To determine

Concept Introduction:

Audit procedure is part of internal control performed by the auditor, to gather the possible document that helps the auditors to make a strong conclusion. The audit procedure helps to determine the nature of the financial information provided by the customers and all kinds of risks that occur in the financial statements. An analytical procedure is a part of audit procedure that evaluates the financial statement by comparing the financial data with the non-financial data.

To describe:Reasons for auditors to generally follow the substantive strategy when audit the long term debt and capital account.

Expert Solution & Answer

Explanation of Solution

A substantive strategy helps to identify the evidence related to a particular transaction, or it helps to collect the reasonable evidence for a specific assertion. While auditing the long term debt and capital account, the auditor follows the substantive strategy, because it is more efficient to use and provide an appropriate result.
The reliance strategy describes when the auditor depends on the test of control to perform the audit, and the auditor should have proper knowledge of tests of controls. The auditors would follow the reliance strategy when the organization continuously involved in the financing activities and performs tests of controls.

Answer 6

Chapter 15, Problem 15.1RQ

To determine

Concept Introduction:

Audit procedure is part of internal control performed by the auditor, to gather the possible document that helps the auditors to make a strong conclusion. The audit procedure helps to determine the nature of the financial information provided by the customers and all kinds of risks that occur in the financial statements. An analytical procedure is a part of audit procedure that evaluates the financial statement by comparing the financial data with the non-financial data.

To describe:Reasons for auditors to generally follow the substantive strategy when audit the long term debt and capital account.

Expert Solution & Answer

Explanation of Solution

A substantive strategy helps to identify the evidence related to a particular transaction, or it helps to collect the reasonable evidence for a specific assertion. While auditing the long term debt and capital account, the auditor follows the substantive strategy, because it is more efficient to use and provide an appropriate result.
The reliance strategy describes when the auditor depends on the test of control to perform the audit, and the auditor should have proper knowledge of tests of controls. The auditors would follow the reliance strategy when the organization continuously involved in the financing activities and performs tests of controls.

Answer 7

Chapter 15, Problem 15.1RQ

To determine

Concept Introduction:

Audit procedure is part of internal control performed by the auditor, to gather the possible document that helps the auditors to make a strong conclusion. The audit procedure helps to determine the nature of the financial information provided by the customers and all kinds of risks that occur in the financial statements. An analytical procedure is a part of audit procedure that evaluates the financial statement by comparing the financial data with the non-financial data.

To describe:Reasons for auditors to generally follow the substantive strategy when audit the long term debt and capital account.

Answer 8

Expert Solution & Answer

Explanation of Solution

A substantive strategy helps to identify the evidence related to a particular transaction, or it helps to collect the reasonable evidence for a specific assertion. While auditing the long term debt and capital account, the auditor follows the substantive strategy, because it is more efficient to use and provide an appropriate result.
The reliance strategy describes when the auditor depends on the test of control to perform the audit, and the auditor should have proper knowledge of tests of controls. The auditors would follow the reliance strategy when the organization continuously involved in the financing activities and performs tests of controls.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Ch. 15 - Prob. 15.1RQ Ch. 15 - Prob. 15.2RQ Ch. 15 - Prob. 15.3RQ Ch. 15 - Prob. 15.4RQ Ch. 15 - Prob. 15.5RQ Ch. 15 - Prob. 15.6RQ Ch. 15 - Prob. 15.7RQ Ch. 15 - Prob. 15.8RQ Ch. 15 - Prob. 15.9RQ Ch. 15 - Prob. 15.10RQ

Explanation of Solution

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