- 34 Marks
AA – May 2018 – L2 – Q1 – Audit Evidence
This question focuses on substantive procedures to verify additions and disposals of non-current assets and statutory books to be audited.
Question
The following figures were supplied by a small business client to your firm regarding its non-current assets for the year ended 31 December 2016:
| Generating Plant (N) | Equipment & Fittings (N) | Furniture (N) | Motor Vehicles (N) | |
|---|---|---|---|---|
| Opening Balance | 400,000 | 3,637,000 | 247,000 | 1,450,000 |
| Additions | – | 530,000 | – | – |
| Disposal | – | – | – | (400,000) |
| Closing Balance | 400,000 | 4,167,000 | 247,000 | 1,050,000 |
Depreciation:
| Generating Plant (N) | Equipment & Fittings (N) | Furniture (N) | Motor Vehicles (N) | |
|---|---|---|---|---|
| Opening Balance | 160,000 | 873,000 | 59,800 | 859,000 |
| Charge for the Year | 80,000 | 416,700 | 24,700 | 260,000 |
| Charge on Disposal | – | – | – | (236,966) |
| Closing Balance | 240,000 | 1,289,700 | 84,500 | 882,034 |
Required:
- Identify FIVE substantive procedures you will carry out to verify additions to the assets in 2016. (10 Marks)
- Explain FIVE substantive procedures for verifying disposal of assets during the year. (10 Marks)
- Explain briefly FOUR of the statutory books that the auditor is required to audit in the course of his audit engagement in an entity. (10 Marks)
Find Related Questions by Tags, levels, etc.
- Tags: Additions, Audit Procedures, Disposals, Non-current Assets, Statutory Books, Substantive Testing
- Level: Level 2
- Topic: Audit evidence
- Series: MAY 2018
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