The following types of internal controls are commonly used by organizations for property, plant, and equipment:
1. A fixed asset master file is maintained with a separate record for each fixed asset.
2. Written policies exist and are known by accounting personnel to differentiate between capitalizable additions, freight, installation costs, replacements, and maintenance expenditures.
3. Depreciation charges for individual assets are calculated for each asset; recorded in a fixed asset master file that includes cost, depreciation, and accumulated depreciation for each asset; and verified periodically by an independent clerk.
4. Acquisitions of fixed assets in excess of $20,000 are approved by the board of directors.
5. When practical, equipment is labeled with metal tags and is inventoried on a systematic basis.

Required
a. State the purpose of each of the internal controls just listed. Your answer should be in the form of the type of misstatement that is likely to be reduced because of the control.
b. For each internal control, list one test of control the auditor can use to test for its existence.
c. List one substantive procedure for testing whether the control is actually preventing misstatements in property, plant, and equipment.