fixed assets

Question 1

_____is the most important assertion in regards to fixed assets

Answer 1

existence

Question 2

existence

Answer 2

the auditor usually emphasizes substantive procedures (test of transactions-verify the debits and credits that cause the ending balance to change from last year)

additions-test the debits and underlying transactions

disposals- trace proceeds to cash receipts journal and to bank statement(s)

Question 3

completeness

Answer 3

review repair and maint expens and look for anything that was expensed that should have been capitalized

review lease aggreements for anything that should be capitalized and wasn’t

Question 4

rights and obligations

Answer 4

inquire of management of any use as collateral as debt

Question 5

valuation

Answer 5

recalculate depn expense

inquire about any impairments (document in management representation letter)