Page 89 - Auditinf Electronic System

7) Realizable value: whether depreciation expense in the period and
accumulated depreciation are properly recorded and posted. Realizable
value applies only to assets

8) Detail tie-in: Current year acquisitions in acquisitions schedule agree with
master file amounts and totals agree with ledger
o Trace individual acquisitions to the master file for amounts
o Foot the acquisition schedule

1) Verify current year acquisitions: Auditors should verify recorded
transactions for correct classification among various equipment accounts.
o Examine purchase or lease contracts to determine whether
capitalization of the equipment is appropriate
a) Capitalization: It is also possible the client has incorrectly capitalized
repairs, rents, or similar expenses, to acquisitions of fixed assets
b) Operating Leases: the client has a right to record equipment as an
asset. Some large manufacturing equipment and other types of
machinery, such as sophisticated medical equipment or computer data
center equipment, may be under an operating lease.

2) Verify current year disposals: Auditor should verify disposals, The
starting point for verifying disposals is the client’s schedule of recorded
disposals Detail tie-in tests of the recorded disposals schedule are
necessary
o tracing the cost and accumulated depreciation of the disposals to the
property master file
o Analyze gains and losses on the disposal of assets and miscellaneous
income for receipts from the disposal of assets
o Review plant modifications and changes in product line, and changes in
major, costly computer-related equipment; property taxes; or insurance
coverage for

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‫جميع الحقوق محفوظة ـ الإعتداء على حق المؤلف بالنسخ أو الطباعة يعرض فاعله للمسائلة القانونية‬