ABC Corporation operates a high end manufacturing facility.The capital intensive nature of the corporation's operations makes internal control over the acquisition and the use of non current assets important management objectives.

At the beginning of every financial year, ABC prepares a non current asset budget that would indicate the planningon their capital expenditure.To prepare this, managers from each department would request capital expenditure from the senior management.This requires them to complete a non current asset requisition form, which must be approved by the senior mangement team.ABC has established property, plant and equipment (PPE) guidance and policies that will determine whether the non current asset requisition is to be considered as capital expenditure or revenue expenditure.

The management committee will meet each month to review the budget reports.Among other things, the committee will also compare actual outcome incurred by the managers to their forecasted figures; and to authorize any additional expenditure needed.The committee also reviews and approves any request for asset disposal.

The entire relevant document pertaining to the non current assets request will be forwarded to the accounting department, including copies of vouchers used to document any department's requests for their asset disposal.As any other accounting department, they are responsible to maintain all the company accounts including the non current assets.

Among the policies of ABC, when an asset is acquired, it will be tagged for indentification and other necessary documentation.This important documentation is needed for subsequent measurement and updating the non current asset ledger.Depreciation will be estimated at year end and posted to the general ledger, together with physical inventories of non current assets.

Required:

(a)Identify at least THREE (3) internal controls over non-current assets at ABC Corporation according to the following objectives:

(i)Authorization procedures

(ii)Accurate transactions

(iii)Propriety of recorded transaction

(iv)Reasonableness of recorded transactions

(15 marks)

(b)Suggest FIVE (5) audit procedures to be performed to determine the adequacy of internal control that may exist to safeguard the ABC's assets.