Page 90 - Auditinf Electronic System

o Make inquiries of management and production personnel about the
possibility of the disposal of assets

3) Verify the ending balance in the asset account:
Two of the auditor’s objectives when auditing the ending balance in the
equipment accounts include determining that:

1. All recorded equipment physically exists on the balance sheet dates (existence)

o the auditor can select a sample from the master file and examine the actual
assets.

2. All equipment owned is recorded (completeness):

o completeness objective, the auditor may physically examine a sample of
major equipment items and trace them to the master file.

o In rare cases, the auditor may decide it is necessary for the client to take a
complete physical inventory of fixed assets to make sure they all exist, and
the fixed asset records are complete

4) Verify depreciation expense:
o Auditors focus on determining whether the client followed a consistent

depreciation policy from period to period and whether the client’s
calculations are correct (accuracy objectives)
o require footnote disclosures related to fixed asset depreciation, including
disclosure of depreciation methods and related useful lives by asset class,
auditors perform procedures to obtain evidence that the four presentation and
disclosure-related audit objectives for depreciation are satisfied.

5) Verify the ending balance in accumulated depreciation:
Two objectives are usually emphasized in the audit of the ending balance in

accumulated depreciation:

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