Page 50 - eBook Audit Of Financial Statement Components

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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