Identify the question that an auditor least likely to include on an internal control questionnaire concerning the initiation and execution of equipment transactions.

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Chapter 19, Problem 15.1MCQ

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Identify the question that an auditor least likely to include on an internal control questionnaire concerning the initiation and execution of equipment transactions.

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The following are typical questions that might appear on an internal control questionnaire relating to plant and equipment: Has a dollar minimum been established for expenditures to be capitalized? Are subsidiary ledgers for plant and equipment regularly reconciled with general ledger controlling accounts? Assuming that the operating effectiveness of each of the above procedures is found to be inadequate, describe how the auditors might alter their substantive procedures to compensate for the increased level of risks of material misstatements.