EBK AUDITING AND ASSURANCE SERVICES
16th Edition
ISBN: 9780134067117
Author: Hogan
Publisher: VST
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Chapter 19, Problem 27DQP
a.
To determine
Explain the manner in which each of these six items during the audit in addition to inquiry to client.
b.
To determine
Prepare the
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You are engaged in the audit of the financial statements of Holman Corporation for the year ended December 31, 20X6. The accompanying analyses of the Property, Plant, and Equipment and related accumulated depreciation accounts have been prepared by the chief accountant of the client. You have traced the beginning balances to your prior year’s audit working papers.
All plant assets are depreciated on the straight-line basis (no residual value taken into consideration) based on the following estimated service lives: building, 25 years; all other items, 10 years. The company’s policy is to take one half-year’s depreciation on all asset additions and disposals during the year.
Your audit revealed the following information:
The company completed the construction of a wing on the plant building on June 30. The service life of the building was not extended by this addition. The lowest construction bid received was $17,500, the amount recorded in the Buildings account. Company personnel…
You use the supplier invoice to populate the "No. of months of depreciation in
the current period" in the depreciation expense recalculation template for a
selected item. Based on this input, the template automatically calculates certain
values.
Which step are you performing in the depreciation expense recalculation?
Recalculate the depreciation expense.
Vouch the data used in the calculation to relevant documentation.
Review the audit file for disconfirming evidence.
Compare the recalculated amounts to the amount recorded in the property,
plant and equipment system.
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
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Accumulated
Date
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Depreciation at
2018
12/31/18
Building RO 1,200,000 July 1,…
Chapter 19 Solutions
EBK AUDITING AND ASSURANCE SERVICES
Ch. 19 - Identify three asset accounts, three expense...Ch. 19 - Explain the relationship between substantive tests...Ch. 19 - Prob. 3RQCh. 19 - Prob. 4RQCh. 19 - Prob. 5RQCh. 19 - Prob. 6RQCh. 19 - Prob. 7RQCh. 19 - Prob. 8RQCh. 19 - Prob. 9RQCh. 19 - Which documents will be used to verify accrued...
Ch. 19 - Prob. 11RQCh. 19 - Prob. 12RQCh. 19 - Prob. 13RQCh. 19 - Prob. 14RQCh. 19 - Prob. 15.3MCQCh. 19 - Prob. 15.1MCQCh. 19 - Prob. 15.2MCQCh. 19 - Prob. 16.1MCQCh. 19 - Prob. 16.2MCQCh. 19 - Prob. 16.3MCQCh. 19 - Prob. 17.1MCQCh. 19 - Prob. 17.3MCQCh. 19 - Prob. 17.2MCQCh. 19 - Prob. 18.1MCQCh. 19 - Prob. 18.2MCQCh. 19 - Prob. 18.3MCQCh. 19 - Prob. 19DQPCh. 19 - Prob. 20DQPCh. 19 - Prob. 21DQPCh. 19 - Prob. 22DQPCh. 19 - Prob. 23DQPCh. 19 - Prob. 24DQPCh. 19 - You are auditing the financial statements of...Ch. 19 - Prob. 29DQPCh. 19 - Prob. 26DQPCh. 19 - Prob. 27DQPCh. 19 - Prob. 28DQP
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