Auditors should obtain evidence that there are no significant amounts of unrecorded retirements of property, plant and equipment. a. Describe three ways that the auditors obtain evidence that there are no significant amounts of unrecorded retirements of equipment.

Auditors should obtain evidence that there are no significant amounts of unrecorded retirements of property, plant and equipment. a. Describe three ways that the auditors obtain evidence that there are no significant amounts of unrecorded retirements of equipment.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Audit Procedures

Audit Procedures are methods and techniques performed by the auditor to determine the quality of financial information of clients, thereby expressing an opinion on true & fair view of financial statements and entity position. They are identified and applied at the planning stage of audit after determining audit objectives, scope, approach, and risk assessment.

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Auditors should obtain evidence that there are no significant amounts of unrecorded retirements of property, plant and equipment.

a. Describe three ways that the auditors obtain evidence that there are no significant amounts of unrecorded retirements of equipment.

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2. XYZ is conducting an audit of the property, plant, and equipment records of AQA Corporation. XYZ selected two specific assets for closer inspection. XYZ has examined documentation related to each asset's original purchase and compared it to the recorded cost, physically inspected the item to determine that it is still in the possession of the company and conducted other similar assurance procedures. The final step in the audit of these accounts is to test the calculations of depreciation expense and accumulated depreciation. XYZ has asked you to perform this final procedure for 2018. Below is a schedule of the two assets, with the depreciation values determined by AQA. The building was depreciated by the straight-line method, and the truck by the double-declining balance method. Determine if the indicated depreciation values are correct. Item Cost Purchase Service Salvage Value Depreciation Expense for Accumulated Date Life Depreciation at 2018 12/31/18 Building RO 1,200,000 July 1,…
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How do you assess the risk of material misstatement associated with the audit of inventories?
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