Exam 12: Auditing Long-Lived Assets: Acquisition, Use, Impairment, and Disposal

For integrated audits,the auditor will test the operating effectiveness of important controls throughout the year with a greater focus on controls as of the client's year-end.

Limited physical access to long-lived assets is a typical internal control that affects multiple assertions for long-lived assets.

Which of the following factors is not an inherent risk related to asset impairment?

Which of the following expense accounts is associated with intangible assets with a definite life?

Effective internal controls over long-lived assets include the use of identification tags secured to assets for proper tracking.

Which of the following procedures is not a fraud-related audit procedure used to respond to identified fraud risk factors?

Asset impairment is not typically assessed by the auditor since it is a subjective management estimate.

Changes in the depreciable lives of equipment may be identified through a substantive audit procedure that includes analyzing depreciation expense as a percent of assets.

Which of the following is not a technique that auditors can use when performing planning analytical procedures related to long-lived assets?

The client should have methods in place to identify and account for intangible-asset impairments.

Which of the following is a true statement about accounting for leases under the FASB standard issued in 2016?

Which of the following is not an audit challenge relevant to fair value estimation of Level 1,2,and 3 assets?

Which is the primary assertion tested in conjunction with obtaining evidence regarding impairment?

Which of the following models is associated with Level 3 in the FASB hierarchy for ascertaining fair value?

Much of the inherent risk related to long-lived assets is due to the importance of management estimates.

It is not important for an organization to have controls to track the location,quantity,condition,maintenance,and depreciation status of long-lived assets because the auditor gathers evidence related to these issues.

An inherent risk related to long-lived assets is the incomplete recording of disposals.

In the audit approach for assessing fair value,which should the auditor determine for Level 2 assets?

When the value of a long-lived asset has been impaired,the organization must write down the asset reflecting the decline in economic benefit of the asset.

Repairs and maintenance Assume that an auditor determines that a client's policy related to recording repairs and maintenance is reasonable,but the auditor has concerns about whether the policy is adhered to.What might cause such concerns and how will the auditor adjust the substantive procedures to be performed?