Fixed Assets Flashcards
1
Q
How does an auditor test the existence of fixed asset?
A
Believe in the beginning balance
Look to additions and disposals of fixed assets (look to support documentation, examining the actual assets)
2
Q
How do you test disposal?
A
Trace proceeds to cash receipt journal
3
Q
How do you test completeness?
A
Review “repairs and maintenance expense”
Review lease agreements where there might be an omission
4
Q
How do you test rights and obligations?
A
Inquire of management that may be used as collateral
5
Q
How do you test valuation?
A
Recalc depreciation
Test impairment- inquire of management of any such impairment and document in management rep letter
