Page 51 - eBook Audit Of Financial Statement Components

8. The search for unrecorded disposals is essential in the audit of the

acquisition and payment cycle.
A True
B False

9. A change in insurance coverage could signal an acquisition or
disposal of an asset.
A True
B False

10. Which of the following substantive procedures provides evidence
over the COMPLETENESS of non-current assets?
A Select a sample of assets included in the non-current asset
register and physically verify them at the client premises
B Review the repairs and maintenance expense account to identify
any items of a capital nature
C For assets disposed of, agree the sale proceeds to supporting
documentation and cash book
D None of the above

11. Describe the substantive procedures the auditor should perform at
the year end to confirm plant and equipment additions.

12. As part of your work as external auditor you are reviewing the non-
current assets audit programme of the internal auditors and notice
that the basis of their testing is a representative sample of
purchase invoices. They use this to test entries in the non-current
assets register and the updating movements on the annual budget.

State a more appropriate test to prove completeness of the non-
current assets records, including the non-current assets register

13. List FOUR assertions relevant to the audit of tangible non-current
assets and state one audit procedure which provides appropriate
evidence for each assertion.

44