Page 50 - eBook Audit Of Financial Statement Components
P. 50
TUTORIAL
1. An auditor can improve the efficiency and effectiveness of an audit
of fixed assets by performing which of the following tests
separately?
A Verification of depreciation expenses
B Verification of current year acquisitions
C Verification current year disposals
D All of the above
2. Auditing of fixed assets differs from that of current assets because:
A The dollar amount for fixed is usually smaller
B Fixed assets are kept for shorter periods
C The number of acquisitions is greater for fixed assets
D None of the above
3. To begin an audit of current year acquisitions, the auditor should
request the client provide them with:
A General ledger
B The property master file
C Vendor invoices
D Repair and maintenance logs
4. Disposal of fixed assets that are handled improperly can affect:
A Income statement
B Statement of cash flow
C Balance sheet
D All of the financial statements
5. The most important balance-related objectives for depreciation
expense is:
A Cut-off
B Completeness
C Accuracy
D Existence
6. A detailed record of all equipment, machinery, etc is usually
maintained in a company in the current asset master file.
A True
B False
7. A common test for detailed balances that tests for accuracy of fixed
asset acquisition is the examination of vendor's invoices.
A True
B False
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