Question

An analysis of fixed assets account has revealed possibility of unrecorded sale of plant and machinery. Which of the following audit procedures may be adopted to discover it?

• A. Examination of property tax files
• B. Inquiry of plant manager
• C. Examination of debits to accumulated depreciation
• D. All of the above

Answer 1

The correct option is D All of the above

This is a primary responsibility of an auditor to verify that all the fixed assets are recorded in the books of account of the business.

To verify the correctness of the recording of the fixed assets, auditor must verify the following:

1) An inquiry from the plant manager

2) Examination of property tax files

3) Detailed analysis of accumulated depreciation account.