What substantive procedure would you perform in the audit of assets and liabilities?

Answer 1

ASSETS Audit to address the various audit assertions including: existence, complteness, rights and obligations, valuation and disclosure. ASSERTION PROCEDURE General Obtain a schedule showing movements in assets for the yearCast the schedule, and agree total to the trial balance and the financial statements Agree figures to the asset register ExistencePhysically inspect the assets to ensure existence Rights and obligations/existence Inspect title deeds or deeds of transfers to ensure that the assets are in the name of the entity Inspect insurance contracts to ensure the assets are insured in the name of the entity Select a sample of asset additions from the ledger for assets and trace them to supplier invoices to confirm prices Rights and obligations, valuation, and authorisation Trace these assets to order, grn and the payment cheque to confirm receipt, and validity as well as value Enquire from management as to accounting for property plant and equipment Apply the accounting policy to assess if the assets are accounted for in terms of the entity policy # If policy is revalue assests ensure assets are carried at revalued cost less accumulated depreciation otherwise carry at cost less accumulated depreciation # Obtain schedules for deprciation calculation and cast and cross cast the file to ensure accuracy # Review the schedule to ensure that correct rates of depreciation have been applied per category as per accounting policy and recalculate depreciation expense.