LO The following questions might be addressed when an auditor is completing an internal control questionnaire. For each question, labeled as 1 through 8: a. Indicate the purpose of the control. b. Indicate the impact on the planned substantive audit procedures if the answer to the question indicates weak controls. 1. Does the client periodically take a physical inventory of prop- erty and reconcile to the property ledger? 2. Does the client have a policy manual to classify property and assign an estimated life for depreciation purposes to the class of assets? 3. Does the client have a policy on minimum expenditures before an item is capitalized? If yes, what is the minimum amount? 4. Does the client have a mechanism to identify pieces of equip- ment that have been designated for scrap? If yes, is it effective? 5. Does the client have an acceptable mechanism to differentiate major renovations from repair and maintenance? If yes, is it effective? 6. Does the client regularly self-construct its own assets? If yes, does the client have an effective procedure to appropriately identify and classify all construction costs? 7. Does the client systematically review major classes of assets for potential impairment? 8. Does management periodically review asset disposal or the scrapping of assets as a basis for reviewing the assignment of estimated life for depreciation purposes