Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Question
Chapter 19, Problem 18.3MCQ
To determine
Identify the tests of details which can be used to support the existence and occurrence assertion of client’s property, plant and equipment transactions.
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Students have asked these similar questions
The 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.
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.
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.
Oc
O a
Chapter 19 Solutions
Auditing And Assurance Services
Ch. 19 - Identify three asset accounts, three expense...Ch. 19 - Explain the relationship between substantive tests...Ch. 19 - Prob. 3RQCh. 19 - Prob. 4RQCh. 19 - Prob. 5RQCh. 19 - Prob. 6RQCh. 19 - Prob. 7RQCh. 19 - Prob. 8RQCh. 19 - Prob. 9RQCh. 19 - Prob. 10RQ
Ch. 19 - Which documents will be used to verify accrued...Ch. 19 - Prob. 12RQCh. 19 - Prob. 13RQCh. 19 - Prob. 14RQCh. 19 - Prob. 15.1MCQCh. 19 - Prob. 15.2MCQCh. 19 - Prob. 15.3MCQCh. 19 - Prob. 16.1MCQCh. 19 - Prob. 16.2MCQCh. 19 - Prob. 16.3MCQCh. 19 - Prob. 17.1MCQCh. 19 - Prob. 17.2MCQCh. 19 - Prob. 17.3MCQCh. 19 - Prob. 18.1MCQCh. 19 - Prob. 18.2MCQCh. 19 - Prob. 18.3MCQCh. 19 - Prob. 19DQPCh. 19 - Prob. 20DQPCh. 19 - Prob. 21DQPCh. 19 - Prob. 22DQPCh. 19 - Prob. 24DQPCh. 19 - Prob. 25DQPCh. 19 - You are auditing the financial statements of...Ch. 19 - Prob. 27DQPCh. 19 - Prob. 28DQPCh. 19 - Prob. 29DQP
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- In auditing depreciation expense, what major considerationsshould the auditor keep in mind? Explain how each can be verifiedarrow_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. O a Od Oc Obarrow_forwardIn the audit of the financial statements, to determine the risks of material misstatement when planning the audit of the tangible fixed assets item, what types of information must the auditor collect? List audit procedures (at least 4 procedures) to collect sufficient and appropriate evidence as a basis for confirmation of tangible fixed assets.arrow_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. Group of answer choices a c b darrow_forwardWhich of the following procedures is not a procedure used by an auditor in searching for unrecorded disposals of long-lived assets? a. Examine property tax records. b. Send confirmations to insurance agents. c. Examine scrap sales accounts. d. Make client inquiries.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
- 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.arrow_forward13. 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_forwardFor which of the following tests would an auditor most likely use attribute sampling?(1) Selecting accounts receivable for confirmation of account balances.(2) Inspecting employee time cards for proper approval by supervisors.(3) Making an independent estimate of the amount of a LIFO inventory.(4) Examining invoices in support of the valuation of fixed asset additions.arrow_forward
- Analyze some common internal controls over inventories. Explain the significant inherent risks associated with inventory. Explain the process of physical inventory counts and the auditor’s observation of this process. Describe common substantive procedures used to audit a client’s property, plant, and equipment. How is depreciation audited? How are intangible assets audited?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_forward1) The auditors analyze repairs and maintenance expense to: a)determine that plant & equipment accounts are not understated. b)determine that all maintenance items are recorded. c)determine that plant & equipment accounts are not overstated d)determine that maintenance expense amounts are authorized. 2)In auditing valuation of property, plant and equipment when its value is impaired, the auditors should: a)recalculate the depreciation expense on the item. b)recompute the net book value of the item. c)vouch the purchase of the item. d)evaluate the valuation model used for the item. 3)Which of the following best describes why auditors audit leased assets in conjunction with the audit of property, plant & equipment? a)Management may choose to lease assets rather than buy them. b)Leased assets have a higher risk of misstatement. c)Most leased assets should be capitalized.d)Repairs and maintenance expense is affected by leased assets. 4)Which of the following best…arrow_forward
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