Principles Of Auditing & Other Assurance Services
21st Edition
ISBN: 9781259916984
Author: WHITTINGTON, Ray, Pany, Kurt
Publisher: Mcgraw-hill Education,
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Chapter 13, Problem 34DOQ
To determine
Identify the appropriate answer related to the management assertion for the given statement.
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When an auditor reviews additions to the equipment (fixed asset) account to make sure that fixed assets are not overstated, she wants to obtain evidence as to management’s assertion regardinga. Completeness.b. Existence.c. Valuation and allocation.d. Rights and obligations.e. Occurrence
explain. If, after obtaining an initial understanding of a client's internal control, the auditor wishes to further reduce the assessed level of control risk relating to plant asset transactions, the auditor should next
Make extensive substantive tests of plant asset balances.
Establish the physical existence of current year additions.
Complete the plant asset section of the internal accounting control questionnaire.
Further test those internal control procedures relating to processing and recording plant asset transactions.
What is the auditor’s role with respect to the fixed asset system?
Chapter 13 Solutions
Principles Of Auditing & Other Assurance Services
Ch. 13 - Prob. 1RQCh. 13 - K-J Corporation has current assets of 5 million...Ch. 13 - Prob. 3RQCh. 13 - Prob. 4RQCh. 13 - Explain the use of a system of authorizations for...Ch. 13 - Moultrie Company discovered recently that a number...Ch. 13 - Does a failure to record the retirement of...Ch. 13 - Prob. 8RQCh. 13 - Prob. 9RQCh. 13 - Prob. 10RQ
Ch. 13 - Prob. 11RQCh. 13 - Prob. 12RQCh. 13 - Prob. 13RQCh. 13 - Prob. 14RQCh. 13 - Prob. 15RQCh. 13 - Gibson Manufacturing Company acquired new factory...Ch. 13 - Prob. 17RQCh. 13 - Do the auditors question the service lives adopted...Ch. 13 - Prob. 19RQCh. 13 - Explain how the existence of lease agreements may...Ch. 13 - Prob. 21RQCh. 13 - Prob. 22QRACh. 13 - Prob. 23QRACh. 13 - Gruen Corporation is a large diversified company...Ch. 13 - Prob. 25QRACh. 13 - Prob. 26QRACh. 13 - Prob. 27QRACh. 13 - Prob. 28QRACh. 13 - Prob. 29QRACh. 13 - Prob. 30QRACh. 13 - Prob. 31QRACh. 13 - To assure accountability for fixed-asset...Ch. 13 - Prob. 32BOQCh. 13 - Which of the following is an internal control...Ch. 13 - Which of the following accounts should be reviewed...Ch. 13 - Prob. 32EOQCh. 13 - Prob. 32FOQCh. 13 - Which of the following statements is not typical...Ch. 13 - Prob. 32HOQCh. 13 - Prob. 32IOQCh. 13 - An effective procedure for identifying unrecorded...Ch. 13 - Which of the following is not an overall test of...Ch. 13 - Prob. 32LOQCh. 13 - Prob. 33OQCh. 13 - Analysis of which account is least likely to...Ch. 13 - Prob. 34BOQCh. 13 - Prob. 34COQCh. 13 - Prob. 34DOQCh. 13 - A search for overstated property, plant, and...Ch. 13 - The following are typical questions that might...Ch. 13 - Prob. 36PCh. 13 - Prob. 37PCh. 13 - Chem-Lite, Inc., maintains its accounts on the...Ch. 13 - Prob. 39PCh. 13 - You are reviewing the property, plant, and...
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- In performing risk assessment procedures for property, plant and equipment, an auditor may inquire of the client personnel which of the following questions? a. Is depreciation calculation and recording automated? b. Is there periodic physical count and tagging of property, plant and equipment? Is the result of the count reconciled to ledgers and general ledgers? c. Both a and b. d. Neither a nor b.arrow_forwardProperty. Plant and Equipment (PPE) are the assets that represent a material portion of the total assets and give significant impact to the presentation in an entity's financial statements.a. What is the important of internal control of fixed asset and explain THREE (3) factors that an auditor should consider in assessing the inherent risk for PPE?arrow_forwardIdentify the management assertion and presentation and disclosure-related audit objective for the specific presentation and disclosure-related auditobjective: Read the fixed asset footnote disclosure to determine that the types of fixedassets, depreciation methods, and useful lives are clearly disclosed.arrow_forward
- 13. As part of auditing equipment, the auditor will inspect new equipment additions selected from the client's property ledger. Thẻ procedure will provide evidence about which of the following assertions? a. Completeness b. Existence c. Valuation d. Rights and oblígations.arrow_forwardThe auditor selects a sample of asset disposals and examines the sales documentation evidencing disposal of the equipment and recomputes gain or loss on the disposal. This audit procedure primarily tests which of the following assertions for the equipment account? a. Presentation and disclosure. b. Rights. c. Valuation. d. Existence.arrow_forwardIn performing risk assessment procedures for property, plant and equipment, an auditor may inquire of the client personnel which of the following questions? a. Is depreciation calculation and recording automated? b. Is there periodic physical count and tagging of property, plant and equipment? Is the result of the count reconciled to ledgers and general ledgers? C. Both a and b. d. Neither a nor b. Oc O aarrow_forward
- In performing risk assessment procedures for property, plant and equipment, an auditor may inquire of the client personnel which of the following questions? a. Is depreciation calculation and recording automated? b. Is there periodic physical count and tagging of property, plant and equipment? Is the result of the count reconciled to ledgers and general ledgers? C. Both a and b. d. Neither a nor b. O a Od Oc Obarrow_forwardIn performing risk assessment procedures for property, plant and equipment, an auditor may inquire of the client personnel which of the following questions? a. Is depreciation calculation and recording automated? b. Is there periodic physical count and tagging of property, plant and equipment? Is the result of the count reconciled to ledgers and general ledgers? c. Both a and b. d. Neither a nor b. Group of answer choices a c b darrow_forwardWhat are specific audit objectives? Explain their relationship to the general audit objectives. Identify the management assertion and general balance-related audit objective for the specific balance-related audit objective: All recorded fixed assets exist at the balance sheet date. Identify the management assertion and presentation and disclosure-related audit objective for the specific presentation and disclosure-related audit objective: Read the fixed asset footnote disclosure to determine that the types of fixed assets, depreciation methods, and useful lives are clearly disclosed.arrow_forward
- When auditing the existence assertion for an asset, auditors proceed from thea. Financial statement amounts back to the potentially unrecorded items.b. Potentially unrecorded items forward to the financial statement amounts.c. General ledger back to the supporting original transaction documents.d. Supporting original transaction documents to the general ledger.arrow_forwardIn testing the existence assertion for an asset, an auditor ordinarily works from the a. Potentially unrecorded items to the financial statements. O b. Financial statements to the potentially unrecorded items. O c. Supporting evidence to the accounting records. O d. Accounting records to the supporting evidence.arrow_forwardWhat is the relationship between the audit of property, plant, andequipment accounts and the audit of repair and maintenance accounts? Explain how theauditor organizes the audit to take this relationship into consideration.arrow_forward
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