You have been asked to carry out the audit of the property plant and equipment of Simons Engineering Limited for the year ended 31 March. The draft accounts show the following movements on non current assets in the year: Freehold Land & Buildings Plant & Machinery Motor Vehicles TOTAL Cost or Valuation GHC GHC GHC GHC At 1st April 353,000 406,000 173,000 932,000 Additions 292,000 86,000 65,000 443,000 Disposals - (29,000) (47,000) (76,000) At 31st March 645,000 463,000 191,000 1,299,000 Freehold Land & Buildings Plant & Machinery Motor Vehicles TOTAL Depreciation GHC GHC GHC GHC At 1st April 132,000 187,000 74,000 393,000 Charge for the year 12,900 43,000 42,000 97,900 On disposals - (25,000) (32,000) (57,000) At 31st March 144,900 205,000 84,000 433,900 NBV at 31st March 500,100 258,000 107,000 865,000 During the current year ended 31 March the company purchased some land and built a new factory, which was completed during the year. The company maintains a PPE register for all information related to property plant and equipment, and it depreciates its fixed assets at the following rates: –Land and buildings 2% on cost –Plant and machinery 10% on cost –Motor vehicles 25% on cost It is the company’s policy to charge a full year’s depreciation on assets in the year of purchase and no depreciation in the year of sale. Required; (a) List and describe the audit tests you would perform to verify the amounts shown in property plant and equipment in the company’s accounts for the current year ended 31 March. if the company did not maintain a PPE register,describe the problems you would experience and how it would affect your audit work and opinion

You have been asked to carry out the audit of the property plant and equipment of Simons Engineering Limited for the year ended 31 March. The draft accounts show the following movements on non current assets in the year: Freehold Land & Buildings Plant & Machinery Motor Vehicles TOTAL Cost or Valuation GHC GHC GHC GHC At 1st April 353,000 406,000 173,000 932,000 Additions 292,000 86,000 65,000 443,000 Disposals - (29,000) (47,000) (76,000) At 31st March 645,000 463,000 191,000 1,299,000 Freehold Land & Buildings Plant & Machinery Motor Vehicles TOTAL Depreciation GHC GHC GHC GHC At 1st April 132,000 187,000 74,000 393,000 Charge for the year 12,900 43,000 42,000 97,900 On disposals - (25,000) (32,000) (57,000) At 31st March 144,900 205,000 84,000 433,900 NBV at 31st March 500,100 258,000 107,000 865,000 During the current year ended 31 March the company purchased some land and built a new factory, which was completed during the year. The company maintains a PPE register for all information related to property plant and equipment, and it depreciates its fixed assets at the following rates: –Land and buildings 2% on cost –Plant and machinery 10% on cost –Motor vehicles 25% on cost It is the company’s policy to charge a full year’s depreciation on assets in the year of purchase and no depreciation in the year of sale. Required; (a) List and describe the audit tests you would perform to verify the amounts shown in property plant and equipment in the company’s accounts for the current year ended 31 March. if the company did not maintain a PPE register,describe the problems you would experience and how it would affect your audit work and opinion

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter12: Auditing Long-lived Assets: Acquisition, Use, Impairment, And Disposal

Section: Chapter Questions

Problem 52RSCQ

See similar textbooks

Related questions

Concept explainers

Question

	Freehold Land & Buildings	Plant & Machinery	Motor Vehicles	TOTAL
Cost or Valuation	GHC	GHC	GHC	GHC
At 1st April	353,000	406,000	173,000	932,000
Additions	292,000	86,000	65,000	443,000
Disposals	-	(29,000)	(47,000)	(76,000)
At 31st March	645,000	463,000	191,000	1,299,000

	Freehold Land & Buildings	Plant & Machinery	Motor Vehicles	TOTAL
Depreciation	GHC	GHC	GHC	GHC
At 1st April	132,000	187,000	74,000	393,000
Charge for the year	12,900	43,000	42,000	97,900
On disposals	-	(25,000)	(32,000)	(57,000)
At 31st March	144,900	205,000	84,000	433,900
NBV at 31st March	500,100	258,000	107,000	865,000

During the current year ended 31 March the company purchased some land and built a new factory, which was completed during the year.
The company maintains a PPE register for all information related to property plant and equipment, and it depreciates its fixed assets at the following rates:

–Land and buildings 2% on cost

–Plant and machinery 10% on cost

–Motor vehicles 25% on cost

It is the company’s policy to charge a full year’s depreciation on assets in the year of purchase and no depreciation in the year of sale.
Required;
(a) List and describe the audit tests you would perform to verify the amounts shown in property plant and equipment in the company’s accounts for the current year ended 31 March.
if the company did not maintain a PPE register,describe the problems you would experience and how it would affect your audit work and opinion

Expert Solution

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Audit procedures for items of Financial Statement

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.