This is the first-year audit of a company that wants to register with the SEC in the
Question:
The database contains the following information for each asset:
• Property identification number
• Property description
• Date acquired
• Cost
• Class of assets
• Depreciation method
• Salvage value (if applicable)
• Current-year depreciation-book
• Accumulated depreciation-book
• Current-year depreciation-tax
• Accumulated depreciation-tax
• Any adjustments such as write-downs or renovations
• Expected life of asset
• Location of property
• Department or person requesting purchase of item
Required
a. Write an audit program to audit the equipment account for the year. Indicate where and how you would use generalized audit software in your audit. (Ignore tax considerations at this point.)
b. Describe how generalized audit software might be used in the audit of property for this client.
c. What audit procedures would have been mandated had the client not taken a physical inventory of property?
Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...
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Related Book For
Auditing a business risk appraoch
ISBN: 978-0324375589
6th Edition
Authors: larry e. rittenberg, bradley j. schwieger, karla m. johnston
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