1. The auditor needs to understand the client's business in order to perform meaningful preliminary analytical procedures.
2. When performing preliminary analytical procedures, the auditor should not typically expect the client to use depreciable lives similar to organizations in the same industry.
3. If a client's long-lived assets involve only a few assets of relatively high value, it might be most efficient to test long-lived assets by using only substantive tests of details.
4. Assume a client setting where there are weak controls and client incentives to capitalize items that should be expensed. In such a setting, the auditor likely obtains most of the audit evidence through tests of controls.
5. When testing a control that requires training for all employees involved in equipment management, the auditor would typically reperform the control.
6. Auditors who are aware of control deficiencies that could result in the material misstatement of lease accounts need to modify their substantive testing in response to those deficiencies.
7. One procedure that can be used to test management's assertion that tangible long-lived assets exist would be to inspect the tangible asset.
8. When testing potential impairment of assets, the auditor may need to rely on work performed by a specialist/expert.

  • CreatedSeptember 22, 2014
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