Page 67 - eBook Audit Of Financial Statement Components

TUTORIAL CHAPTER 4

1. D All of the above

2. D None of the above

3. B The property master file

4. D All of the financial statements

5. C Accuracy

6. False

7. True

8. True

9. True

10. B Review the repairs and maintenance expense account
to identify any items of a capital nature

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

– Obtain a breakdown of additions, cast the list and agree to the
non-current asset register to confirm completeness of plant and
equipment (P&E).

– Select a sample of additions and agree cost to supplier invoice to

confirm valuation.

– Verify rights and obligations by agreeing the addition of plant and
equipment to a supplier invoice.

– Review the list of additions and confirm that they relate to capital
expenditure items rather than repairs and maintenance.

– Review board minutes to ensure that significant capital

expenditure purchases have been authorised by the board.