Question
Items (a) through (e) are examples of internal controls you have documented for the Property Plant and Equipment and Depreciation area.For each of the items
Items (a) through (e) are examples of internal controls you have documented for the Property Plant and Equipment and Depreciation area.For each of the items below state the primary audit assertion being fulfilled if the control is in effect and reason:
a)An annual PP&E stocktake is carried out and any damaged items (including the nature and extent of the damage) are noted in the stocktake report.
b)All ledger entries, for items of PP&E, include the purchase invoice number.
c)At the end of the financial year, the accountant compares the fixed asset register to the lease contracts that the firm has entered into, to see that no leased assets are included in the register.
d)Before the depreciation is calculated, for an item of PP&E, the accountant checks that the useful life of the PP&E item is reasonable.
e) After the depreciation expense has been calculated, the accountant reconciles the depreciation expense account to the fixed asset register, to check that all depreciable items have an entry in the depreciation expense account
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started