Page 47 - eBook Audit Of Financial Statement Components

CHAPTER 4: AUDITING PROCEDURES ON

NON-CURRENT ASSETS

Non-current assets are distinguished from current assets by the

following characteristics:

• are long-term in nature
• are not normally acquired for resale

• are could be tangible or intangible

• are used to generate income directly or indirectly for a
business

• are not normally liquid assets (i.e. not easily and quickly

Details held on converted into cash without a significant loss in value).
such a register
may include:
Non-current asset registers are, as the name suggests, a record of
- cost the non-current assets held by a business. These form part of the
- date of
purchase internal control system of an organisation.
- description of
asset
- serial/reference This section discusses tests on the audit for Property, Plant and
number
- location of asset Equipment (PPE). PPE are tangible asset that have expected lives
- depreciation of more than one year, are used in the business, and are not
method
- expected useful acquired for resale.
life
- net book value.
The main issues in auditing PPE relate to the transactions for

purchasing new assets and disposing of old assets, including

profits or losses on sale. In addition, consideration is required in

relation to depreciation charges, the treatment of leased assets

and asset revaluations.

40