Exam 13: Property Plant and Equipment: Depreciation and Depletion

Which of the following best describes the auditors' approach to the audit of the ending balance of property,plant and equipment for a continuing nonpublic client?

In the audit of depletion the auditors must often rely on the work of specialists.

Which of the following would be least likely to address control over the initiation and execution of equipment transactions?

Which of the following is a customary audit procedure for the verification of the legal ownership of real property?

In testing for unrecorded retirements of equipment,an auditor might.

The most likely technique for the current year audit of goodwill which was acquired three years ago by a continuing audit client:

An auditor has identified numerous debits to accumulated depreciation of equipment.Which of the following is most likely?

In the examination of property,plant,and equipment,the auditor tries to determine all of the following except the:

Which of the following best describes the independent auditors' approach to obtaining satisfaction concerning depreciation expense in the income statement?

Which of the following is not one of the auditors' objectives in auditing depreciation?

The primary purpose of internal control over plant and equipment is to safeguard the assets from theft.

The auditors typically observe all major items of property,plant and equipment every year.

When performing an audit of the property,plant and equipment accounts,an auditor should expect which of the following to be most likely to indicate a departure from generally accepted accounting principles?

A continuing audit client's property,plant and equipment and accounts receivable accounts have approximately the same year-end balance.In this circumstance,when compared to property,plant and equipment one would normally expect the audit of accounts receivable to require:

A typical procedure in the audit of property is examination of public records to verify the ownership of the property.

When comparing an initial audit with a subsequent year audit for a particular client,the scope of audit procedures for which of the following accounts would be expected to decrease the most?

Plant and equipment are not as inherently risky as are other assets,such as inventories and accounts receivable.However,a company should still endeavor to maintain effective internal control over plant and equipment. a.Describe the principal purpose of internal controls relating to plant and equipment. b.List and describe four major controls applicable to plant and equipment.

Auditors should obtain evidence that there are no significant amounts of unrecorded retirements of property,plant and equipment. a.Describe two ways that the auditors obtain evidence that there are no significant amounts of unrecorded retirements of property (land). b.Describe three ways that the auditors obtain evidence that there are no significant amounts of unrecorded retirements of equipment.

Which of the following is not a control that should be established for purchases of equipment?