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Auditing of Fixed Assets

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AUDIT OF FIXED ASSETS
Auditing of Fixed Assets
American Psychological Association’s Guidelines
Your name
Your instructor’s name

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AUDIT OF FIXED ASSETS
Fixed Assets:
Fixed assets are considered as tangible assets of an organization in order to
manage its operation as well as to produce products and services. Fixed assets
represent largest item on balance sheet in many capital intensive industries such
as healthcare, power-generation and manufacturing. Historically fixed assets
received insignificant scrutiny while in the process of audit as a result there have
been found material frauds or misstatements during the preparation of financial
statements.
Audit tests for addition and retirement of fixed assets:
Obtain a detailed Schedule for addition and retirement of Fixed Assets.
Check and investigate the major vendor’s invoices for the addition of assets,
preparation of cost records, deeds or titles, and confirm that acquisition as well as
retirement of assets is properly recorded. (E and V)
If fixed assets schedule is not generated from accounting software i.e., also out-
of-box or tested, then foot and tie the fixed assets schedule. (C) The auditor
should document of the basic features of system and circumstances that lead for
the indication of fraud or errors.

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 Auditing of Fixed Assets American Psychological Association’s Guidelines Your name Your instructor’s name Fixed Assets: Fixed assets are considered as tangible assets of an organization in order to manage its operation as well as to produce products and services. Fixed assets represent largest item on balance sheet in many capital intensive industries such as healthcare, power-generation and manufacturing. Historically fixed assets received insignificant scrutiny while in the process of audit as a result there have been found material frauds or misstatements during the preparation of financial statements. Audit tests for addition and retirement of fixed assets: Obtain a detailed Schedule for addition and retirement of Fixed Assets. Check and investigate the major vendor’s invoices for the addition of assets, preparation of cost records, deeds or titles, and confirm that acquisition as well as retirement of assets is properly recorded. (E and V) If fixed assets schedule is not generated from accounting software i.e., also out-of-box or tested, then foot and tie the fixed assets schedule. (C) The auditor should document of the basic features of system and circumstances that lead for the indication of fraud or errors. Audit Test for Depreciation Expenses: Obtain a fixed assets schedule indicating accumulated depreciation along with opening and closing balances. Foot and tie it to the general ledger in case if the client’s IT system is has not been t ...
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