How do you audit capital expenditure?

Answer 1

To audit capital expenditure, start by reviewing the organization's capital budgeting process to ensure it aligns with strategic goals. Verify the approval process for capital projects, ensuring that all expenditures are properly authorized and documented. Examine supporting documentation, such as purchase orders, invoices, and contracts, to confirm that expenditures are valid and accurately recorded in the financial statements. Finally, assess the asset management practices, including depreciation and impairment reviews, to ensure that capital assets are being monitored and accounted for appropriately.