【正文】 or discount is then calculated and multiplied by the number of months still outstanding. e. The following information should be requested from the bondholder in the confirmation of bonds payable: 1. Amount of bond 2. Maturity date 3. Interest rate 4. Payment dates 5. Payment amounts 6. Assets pledged as security 7. Restrictions on client activities2224 a. The auditing necessary for notes payable and related interest accounts in these circumstances would be minimal. Aside from checking interest calculations and postings to the proper accounts as a matter of audit routine, the only major audit procedure would be to confirm the amount and provisions of the note with the bank. b. If Fox was unprofitable, had a need for additional financing, and had deficient internal controls, it would be necessary to search for unrecorded notes. This could be done by obtaining standard bank confirmations with specific reference to the existence of notes payable, reviewing the bank statements and reconciliations for new notes credited directly to the bank account by the bank, and analyzing interest expense to uncover a payment to a creditor who is not included on the notes payable schedule.2225 a. The emphasis in the verification of notes payable in this situation should be in determining whether all existing notes are included in the client39。 equity is more plex due to the existence of a larger number of shareholders and frequent changes in the individuals holding stock. The audits are not significantly different in regard to whether the transactions in the equity accounts are properly authorized and recorded and whether the amounts in the accounts are properly classified, described, and stated in accordance with generally accepted accounting principles. 2214 The duties of a stock registrar are to make sure that stock is issued by a corporation in accordance with the capital authorization of the board of directors, to sign all newly issued stock certificates, and to make sure old certificates are received and cancelled before a replacement certificate is issued when there is a change in the ownership of the stock. The duties of a transfer agent are to maintain the stockholder records, and in some cases, disburse cash dividends to shareholders. The use of the services of a stock registrar improves the effectiveness of the client39。 equity are: 1. Proper authorization of transactions 2. Proper record keeping 3. Adequate segregation of duties between maintaining owners39。 equity accounts are to determine whether: 1. The internal controls over capital stock and related dividends are adequate. 2. Owners39。 equity transactions are recorded properly, as defined by the following six transactionrelated audit objectives:n Occurrencen Completenessn Accuracyn Posting and summarizationn Classificationn Timing2210 (continued)3. Owners39。 equity records and handling cash and stock certificates 4. The use of an independent registrar and stock transfer agent2213 The audit of owners39。s internal controls by preventing the improper issuance of stock certificates. Along similar lines, the use of the services of an independent transfer agent improves the control over the stock records by putting them in the hands of an independent organization.2215 The number of shares outstanding, the correct valuation of capital stock transactions, and par value can all be confirmed with a transfer agent. The balance can then be easily recalculated from this information.2216 Since it is important to verify that properly authorized dividends have been paid to owners of stock as of the dividend record date, a parison of a random sample of cancelled dividend checks to a dividend list prepared by management would be inadequate. Such an audit step is useless unless the dividend list has first been verified to include all stockholders of record at the dividend record date. A better test is to determine the total number of shares outstanding at the dividend date from the stock registrar and repute the total dividends that should have been paid for parison with the total amount actually paid. A random sample of cancelled checks should then be pared to the independent registrar39。s records. The four audit procedures listed do not satisfy this emphasis. b.AUDIT PROCEDUREPURPOSE1To determine if the notes payable list reconciles to the general ledger.2To determine if the notes payable on the list are correctly recorded and disclosed.3To verify that all recorded notes payable are properly recorded and disclosed.4To insure that interest expense is properly recorded on the books.2225 (continued) c. Procedure 2 is not necessary in light of procedure 3. They both perform the same function and the confirmation is from an independent source. The sample sizes for the procedures are probably appropriate, considering the deficiencies in record keeping procedures. d. In addition to the procedures mentioned, the following ones are essential because there must be a search for unrecorded notes:1. Analyze interest expense and send a confirmation for notes payable to all payees not receiving a confirmation for notes.2. Confirm the balance in notes payable to payees included in last year39。s records is determined faster and more effectively by doing them together. c. The audit procedures that should ordinarily be performed to verify the issue of the mortgage, the balance in the mortgage and interest payable, and the balance in the interest expense accounts are: 1. Determine if the mortgage was properly authorized. 2. Obtain the mortgage agreement and schedule the pertinent provisions in the permanent file, including the face amount, payments, interest rate, restrictions, and collateral. 3. Confirm the mortgage amount, terms, and collateral with the lending institution. 4. Repute interest payable at the balance sheet dat