TED Ltd. has taken an office building on rent for its operations. The auditor wants to verify the rent expense recorded in the books. Describe the…

Audit procedures to be performed by auditor to verify rent expenses: Obtain a month wise expense schedule along with the rent agreements.Verify if expense has been recorded for all 12 months and whether the rent amount is as per the underlying agreement.Specific consideration should be given to escalation clause in the agreement to verify if the rent was required to be recorded on a straight-line basis during the period under audit.Also, verify if the agreement is in the name of the entity and whether the expense pertains to premises used for running business operations of the entity.