Explain the assurances that an auditor seeks to obtain in the audit of tangible fixed assets.

      

Explain the assurances that an auditor seeks to obtain in the audit of tangible fixed assets.

  

Answers


Wilfred
– Ownership: The auditor needs to verify that there was authority issued for the purchase of an asset by the company.
– Cost: The auditor should verify the cost as given by comparing it with manufacturer or dealers.
– Valuation: This assurance will be acquired by ensuring appropriate depreciation has been charged, so that valuation at year end is reasonable.
– Existence: By physically inspecting the assets, noting down their details.
– Presentation and Disclosure: Here the auditor analysis the classification of the assets,noting distinction between leased assets (if any) and fully owned assets as disclosed in the Balance Sheet.
– In the event of disposal, the auditor should verify issuance of authority to dispose,reason-ability of disposal price and correct recording.
– Check receipt of the disposal price and proper recording in the records.
Wilfykil answered the question on February 22, 2019 at 11:21


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