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During a meeting with the senior management of GreenGrass Enterprises, LLC , a distributor of lawn care and fertilizer products across the country, a query
During a meeting with the senior management of GreenGrass Enterprises, LLC a distributor of lawn care and fertilizer products across
the country, a query has been raised by the external auditors pertaining to the client's use of doubledeclining balance method
depreciation. The auditors are attempting to confirm their understanding as to why the client uses this method. The documentation
and reasoning behind this choice of accounting method is most likely to be found
in the current year's audit file, and typically located in the risk assessment section under substantive tests of details.
in the internal audit function, as this function, per generally accepted auditing standards, maintains responsibility for
selection of appropriate accounting methods.
in the permanent audit file, which typically contains details of significant accounting methods used by the client.
in the minutes of the board of directors meeting, as this choice of depreciation method has to be voted on by senior
management at least once a year.
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