15. An internal control objective concerning property, plant and equipment (PPE) acquisitions is that they be recorded at the correct amounts and in the proper period and properly classified. In which of the following conditions would an auditor most likely assess a high level of risk of material misstatement? All material acquisitions of PPE are required to be approved by the board of directors Most additions are self-constructed by the entity a. b. с. Recently acquired loans include covenants that preclude further plant acquisitions for 5 years. d. Gross PPE increased 30% during the current period
15. An internal control objective concerning property, plant and equipment (PPE) acquisitions is that they be recorded at the correct amounts and in the proper period and properly classified. In which of the following conditions would an auditor most likely assess a high level of risk of material misstatement? All material acquisitions of PPE are required to be approved by the board of directors Most additions are self-constructed by the entity a. b. с. Recently acquired loans include covenants that preclude further plant acquisitions for 5 years. d. Gross PPE increased 30% during the current period
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:15. An internal control objective concerning property, plant and equipment (PPE) acquisitions is that they be recorded at the
correct amounts and in the proper period and properly classified. In which of the following conditions would an auditor most
likely assess a high level of risk of material misstatement?
All material acquisitions of PPE are required to be approved by the board of directors
Most additions are self-constructed by the entity
a.
b.
C.
Recently acquired loans include covenants that preclude further plant acquisitions for 5 years.
d.
Gross PPE increased 30% during the current period
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