AUDIT OF

LIABILITIES AND
HERITAGE
Prepared by:

SANDRA PATRICIA BUENO

LAURA MARCELA FORERO
ANA MILAGROS GAMEZ

Teacher:
SONIA ROCIO SERRANO LEÓN

PUBLIC ACCOUNTING
2021
AUDIT OF LIABILITIES
CURRENT LIABILITIES

Current liabilities are those that must be settled within the

current period or business operating cycle and generally it
they use current asset resources.
Including the items:
I. Liabilities related to non-current assets held for sale.

II. Short-term provisions

III. Short-term debts

IV. Short-term debts with group companies and associates

V. Trade creditors and other accounts payable

VI. Short-term periodizations

VII. Short-term debt with special characteristics

 AUDIT OF THE
CURRENT LIABILITIES
It is the one that is responsible for examining and applying
all auditing techniques to all
obligations appreciable in money on behalf of
company, which must be cancelled in a
a period no longer than one year, or within the period
accountable.

The auditor determines that each process is the

suitable for it to be evidenced in a way
satisfactory that current liabilities have
suitable, authorized, and accounted for
correctly.
OBJECTIVES OF LIABILITIES AUDIT
CURRENT
Check that the liabilities reflected in the
balance sheets are real.
Verify the correct classification and valuation of the
balances
Check that the liabilities are adequate
classified, described and revealed in the states
financial, including the notes.
Verify the timely compliance with obligations
debt amortization and interest payments.
Evaluate if the internal control in place is appropriate.
about these liabilities.
Check that there is an adequate presentation of
all items and information that are audited.
 INTERNAL CONTROL
In charge of overseeing the organizational scheme and the set of plans,
methods, principles, standards, and procedures which is in charge of the
verification and evaluation of current liabilities.

For this reason, the objectives related to authorization must be met.

processing and classification of transactions, verification and evaluation.

Procedures

Planning
Analytical Review
Compliance Tests
Substantive tests
Confirmation
Subsequent payments
Document review
Research in search of possible unregistered liabilities
Verification of calculations and global tests.
PRESENTATION AND REVELATION IN
THE FINANCIAL STATEMENTS
The auditor must ensure the following aspects:

That the liability is classified according to its date of

settlement.

That in the case of liabilities in foreign currency it is revealed in

notes or in the balance.
To be informed about guarantees.

Let it be informed about the restrictions.

That in the case of financing, it is revealed in the statements.

financial.
Non-Current Liabilities
Non-current liabilities, called
also as fixed passive, it is formed
for all those debts and obligations
of a company or entity that must
to be satisfied in the long term, that is,
whose expiration is in the period of
time longer than 1 year. Thus, the company
is not obliged to return the quantum
principal in the current year, but it is indeed
obliged to satisfy the interests.
 COMPOSITION OF
NON-CURRENT LIABILITIES
Within the non-current liabilities, we find different
elements that constitute it. They can be differentiated
the following:

1. Long-term provisions, that is, those that have

to be paid within a period of more than 1 year.
2. Long-term debts, that is, those that must be
satisfied within a period of more than 1 year.
3. Debts with entities of the corporate group and
long-term associated, that is, whose maturity
it has a time period of more than 1 year.
4. Long-term periodizations, meaning with a
period of time longer than 1 year.
 OBJECTIVES OF THE AUDIT
FROM NON-CURRENT LIABILITIES

Verify that the Generally Accepted Accounting Principles are being followed.
Accepted.
Determine if there is continuity within the applied regulations.
from one period to another.
Determine that the internal control system is adequate.
Obtain satisfactory evidence regarding the authorization for
incur in non-current liabilities.
Verify the correct classification of the corresponding accounts
non-current liabilities.
Establish that all non-current liabilities have been
accounted for, classified, and presented correctly.
Determine that the interests payable are correct.
Check that the liabilities are properly classified,
described and revealed in the financial statements.
 INTERNAL CONTROL FOR ACCOUNTS OF
NON-CURRENT LIABILITIES

The internal control measures for liabilities do not

currents primarily refer to:

Establish control over the correct payment of

obligations and interests.
It will be convenient for the company to have a
auxiliary register for these obligations.
Exert proper control over the payment of
interests generated by non-current liabilities
in such a way that no sums are paid
higher than the correct and agreed upon.
 WORKING PAPERS
As an example, the following is presented:
internal control questionnaire for the accounts of
non-current liabilities:
 AUDIT PROCEDURES FOR THE
NON-CURRENT LIABILITIES
In an audit of non-current liabilities, the following must be considered
procedures:

Prepare a list of non-current liabilities that indicates the dates of origin,

renewal and expiration, beneficiary, amount, payments or endorsements, and if possible
interests.

Compare the book balances of non-current liabilities with the list and verify.
the antiquity of obligations.

Request the confirmation of balances.

Investigate the existence of debit balances and reclassify them into an asset account.

• Review the monthly statements of non-current liabilities as a basis for

individual balance verification.
Investigate the relevant, abnormal balances or
antiguos y obtener una explicación para ellos.

Examine from its origin, through tests

selective each transaction since the
authorization until payment, identifying the
possible effects on the outstanding amount of
payment at the end of the period.

Check the regular monthly statements

from non-current liabilities against the
liabilities recorded at the end of the year
 IMPORTANT DISCLOSURES OF LIABILITIES

Ensure that there is appropriate presentation and disclosure of liabilities in the financial statements,
taking into account, among others, the following aspects:

1. That the asset is classified according to its settlement or maturity date as short-term and long-term.

2. That the presentation of the different short-term liability concepts within the balance sheet be made
taking into account both the grouping of similar nature liabilities and the conditions of
enforceability and relative importance.

3. That the liabilities representing short-term bank financing be presented separately.

4. In case there are significant liabilities in foreign currency, this situation should be disclosed, whether in the
same balance sheet or in a note to the financial statements, indicating which foreign currency it is about.

5. That in the case of long-term liabilities, it is presented with as much detail as necessary.

6. That in the body of the balance sheet or in a note to the financial statements the guarantees be reported, if any
would have, of any passive.
 HERITAGE
The IFRS define equity as the residual part of the
assets once liabilities have been deducted.

In reality, the company's equity is nothing more than the asset.

from which liabilities are deducted.

Donald E. Kieso
 OBJECTIVES
Check their proper presentation and disclosure in the
Financial Statements.
Obtain evidence that all movements of the equity
are properly registered in the accounts
appropriate in accordance with the current legal documentation.
Review that the equity accounts are clear and
correctly identified.
Check that the balances of the equity accounts are
properly valued and that correspond to
real transactions.
Confirm that the internal control procedures with
regarding the heritage be adequate and applied
correctly.
 SCOPE
Verify that the equity recorded in the Financial Statements
from the Company, the elements are reasonably reflected,
find correctly valued and be subject to the regulations
applicable.
 PROGRAM OF
WORK
To develop a process for auditing heritage
efficiently it should be:
 INTERNAL CONTROL FOR THE
HERITAGE ACCOUNTS

The main internal control measures revolve around:

Verify the existence of records of the issuance of the titles

that cover the parts of the share capital.
Custody and accounting of titles
Authorization and proper procedures for payment of
dividends.
Timely information to the Accounting Department of the
agreements of the shareholders or administrators that affect the
accounts of the equity.
Información sistematizada sobre cifras actualizadas.
PAPERS OF
WORK
 PROCEDURE OF
THE AUDIT
The auditor must obtain information about the characteristics of
each of the lines of the heritage, such as:
1. Request for information:

(if it is the first

review
 PROCEDURE OF THE
AUDIT

[Link] of the internal control questionnaire to the

responsible officials.
2. Prepare a summary of the composition of capital according to
articles of incorporation, as well as modifications to it, such
in a way that the minutes books and the
member records.
3. Confirm the outstanding shares with the register book
of shareholders.
4. Verify the proceeds from the issuance of shares.
[Link] the origin of other items included in the
heritage section.
6. Analyze the earnings of the period in relation to the State of
Results.
 TECHNIQUES
The auditor must apply the following techniques:

Analysis of financial ratios

Obtain explanation of significant variations and
investigate any unusual or unexpected relationship
between the audited year and the previous one
 STUDY AND EVALUATION
Having been determined preliminarily, the
trust that can be placed in the system of
internal accounting control through monitoring and the
observation of the transactions of the existence of the
key controls and considering the relative importance
and the audit risk in the items of equity.

The auditor will be in a position to define the nature of

the audit procedures, both of
compliance as nouns, with the scope and
objectivity that I consider necessary in the
circumstances.
 CONCLUSIONES
The audit of the liability accounts and
heritage not only requires knowledge and
techniques specific to auditing, also
require a high degree of knowledge of the
procedures, legal norms, application of
accounting criteria of other sections of the
Financial Statements such as revaluations,
currency conversion and investment registration
in addition to other risks unrelated to the review
accountable, like the tax authorities and legitimization of

capitals.
 BIBLIOGRAPHY
[Link]
of-audit-of-liabilities-and-capital/

[Link]
company assets
It's time to......
1. What is understood by non-passive?
current?
They are those elements that do not
Set of debts and obligations
they have the ability or one does not have it
from a long-term company.
intention to convert them into effect
in the short term.

Resources that are necessary for Group of goods, rights and

carry out daily activities obligations of a person and
of the company. company
1. What is meant by non-passive?
current?
They are those elements that do not
Set of debts and obligations
they have the capability or do not have it
from a long-term company.
intention to convert them into cash
in the short term.

Resources that are necessary for Group of goods, rights and

carry out daily activities obligations of a person and
from the company. company
2. What are the procedures of
audit for non-current liabilities?

Request confirmation of balances. Investigate the existence of balances

debit and reclassify them in a
asset account.

Investigate relevant or abnormal balances

ancient ones and obtain an explanation for them. All of the above.
2. What are the procedures for
audit for non-current liabilities?

Request confirmation of balances. Investigate the existence of balances

debit and reclassify them in a
asset account.

Investigate the relevant, abnormal balances or

ancient and obtain an explanation for them. All of the above.
3. What is the audit of liabilities?
currents?
It is responsible for examining and applying the
Liabilities linked to non-assets
audit techniques for all
currents.
obligations appreciable in money to
company cargo.

Short-term debts. They are those who must be

canceled within the period
current or cycle of operations of the
business.
3. What is the audit of liabilities
currents?
It is responsible for examining and applying the
Liabilities related to non-assets
audit techniques to all the
currents.
obligations appreciable in money to
company position.

Short-term debts. They are those who must be

canceled within the period
current or cycle of operations of
business.
4. An objective of the liability audit
current

Debt with special characteristics Application of all techniques of

in the short term audit.

Short-term provisions. Check that the liabilities that are

reflected in the balance sheet are
real.
4. An objective of the liability audit
current

Debt with special characteristics Application of all techniques of

in the short term audit.

Short-term provisions. Check that the liabilities that are

reflected in the balance sheet are
real.
5. What is equity according to IFRS?

Resource controlled by the entity

Residual part of the assets once
as a result of past events and
The liabilities have been deducted.
from which he hopes to obtain in the future
economic benefits.

Present obligation of the company due to All of the above

previous events.
5. What is equity according to IFRS?

Resource controlled by the entity

Residual part of the assets once
as a result of past events and
the liabilities have been discounted.
from which it expects to obtain in the future
economic benefits.

Present obligation of the company due to All of the above

previous events.