In performing risk assessment procedures for property, plant and equipment, an auditor may inquire of the client personnel which of the following questions?
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- In performing risk assessment procedures for property, plant and equipment, an auditor may inquire of the client personnel which of the following questions? A. Are all property, plant and equipment purchases, including finance leases, properly authorized, recorded in accordance with the capitalization threshold (e.g., P10,000) and in correct accounting period? B. Are depreciation policies in accordance with applicable financial reporting framework? C. All of the choices. D. Are disposals of property, plant and equipment properly authorized, removed from records including depreciation, and recorded in correct accounting period?In performing risk assessment procedures for property, plant and equipment, an auditor may inquire of the client personnel which of the following questions? A. Are depreciation policies in accordance with applicable financial reporting framework? B. Are disposals of PPE properly utilized, removed from records including depreciation, and recorded in correct accounting period? C. All of the choices D. Are all PPE , including finance leases, properly authorized, recorded in accordance with the capitalization threshold (ex. 10,000) and in correct accounting period?16. In performing risk assessment procedures for property, plant and equipment, an auditor may inquire of the client personnel which of the following questions? Group of answer choices Are depreciation policies in accordance with applicable financial reporting framework? Are disposals of property, plant and equipment properly authorized, removed from records including depreciation, and recorded in correct accounting period? Are all property, plant and equipment purchases, including finance leases, properly authorized, recorded in accordance with the capitalization threshold (e.g., P10,000) and in correct accounting period? All of the choices.
- In performing risk assessment procedures for property, plant and equipment, an auditor may inquire of the client personnel which of the following questions? a. Is depreciation calculation and recording automated? b. Is there periodic physical count and tagging of property, plant and equipment? Is the result of the count reconciled to ledgers and general ledgers? c. Both a and b. d. Neither a nor b. Group of answer choices a c b d1. Of the following assertions, which is generally considered a particularly high risk for self-constructed fixed assets? a. Completeness b. Presentation c. Ownership (rights) d. Valuation 2. Which of the following types of fixed assets is considered to have higher inherent risk? a. Leased fixed assets b. Purchased equipment c. Vehicles d. Purchased buildings 3. Which of the following is the usual audit procedure for testing the existence assertion for fixed assets? a. Vouching a sample of additions to fixed assets made during the fiscal year being audited, to supporting vendor invoices. b. Vouching a sample of deletions of fixed assets made during the fiscal year being audited and prior years, to supporting vendor invoices. c. Tracing a sample of vendor invoices to debits to fixed assets during the fiscal year being audited. d. Substantive analytical procedures 4. An auditor has been assigned to audit the existence assertion for fixed assets. The auditor (a Mercer graduate) should…Required (kindly explain answers): 1. Why is it necessary to examine the lapsing schedule for additions and disposals of property, plant and equipment? 2. How do auditors test the reasonableness of the estimates used in relation to PPE (e.g. depreciation method, useful life, residual value?) 3. What are the procedures involved in determining the reasonableness of the depreciation expense during the year?
- In the examination of property, plant, and equipment, the auditor tries to determine all of the followingexcept theA. Effectiveness of the internal control structureB. Authorization of property abandoned during the yearC. Presence of an insurance policy related to property, plant, and equipmentD. Availability of company’s depreciation policyE. None of themProperty. Plant and Equipment (PPE) are the assets that represent a material portion of the total assets and give significant impact to the presentation in an entity's financial statements.a. What is the important of internal control of fixed asset and explain THREE (3) factors that an auditor should consider in assessing the inherent risk for PPE?The least effective means for the auditor to determine whether a recorded intangible asset possesses the characteristic of an asset is a. Vouch the purchase by reference to underlying documentation. b. Inquire as to the status of the patent application. c. Evaluate the future revenue-producing capacity of the intangible asset. d. Analyze the research and development expenditures to determine that only those expenditures possessing future economic benefits have been capitalized.
- Before applying substantive procedures to the details of asset and liability accounts at an interim date, the auditor should: Mutiple Choice consider the sblity of the suditor to perform aporopriate substartive procedures to cover the remaining period. investigete significant uctiations thet have occured in the asset and lability accounts since the previous balance sheet date. select only those accounts wich can eflectively be samplied during year end audit work consider the compliance tests that mut be applied at the balance sheet date to extend the audit conclusions reached at the interim date.Which of the following best describes the independent auditor's approach to obtaining satisfaction concerning depreciation expense in the income statement? a.Review the mathematical accuracy of the amounts charged to income as a result of depreciation expens b.Determine the method of computing depreciation expense and ascertain that it is in accordance with generally accepted accounting principle c.Support the basis of depreciable assets and the depreciation expens d.Reconcile the amount of depreciation expense to those amounts credited to accumulated depreciation account e.Select a sample of equipment items in the manufacturing facility and vouch back to the recorded subsidiary ledge r.s.e.s.e.ry ledger.The least effective means for the auditor to determine whether a recorded intangible asset possesses the characteristic of an asset is Vouch the purchase by reference to underlying documentation. Inquire as to the status of the patent application. Evaluate the future revenue-producing capacity of the intangible asset Analyze the research and development expenditures to determine that only those expenditures possessing future economic benefits have been capitalized.