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An auditor has identified numerous debits to accumulated depreciation of equipment.

Plant assets were retired during the year

Not on of the auditors' objectives in auditing depreciation

Establishing the reasonableness of the client's replacement policy

A continuing audit client's property, plant, and equipment and accounts receivable accounts have approximately the same year-end balanve

Expect the audit of accounts receivable to require more audit time

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

recomputation

The auditors may expect a proper debit to goodwill due to

A business combination

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

Establich the basis for depreciable assets and verify the depreciation expense

In testing for unrecorded retirements of equipment, an auditor might

Slect items of equipment form the accounting records and then attempt to locate them during the plant tour

A plant manager would be mosst likely to provide information on

the existence of obsolete production equipment

Least likely to address control over the initiation and execution of equipment transactions are

procedures that exist to restrict access to equipment

When there are numerous property and equipment transactions during the year, an auditor who plans to assess control risk as a low level usually performs:

Tests of controls and limited tests of current year and property equipment transactions

The following best describes the auditor's approach to the audit of the ending balance of property, plant, and equipment for a continuing nonpublic client

Agreement of the beginning balance to prior year's working papers and audit of significant changes in the accounts

The following is not a control that should be established for purchases of equipment

Requiring that the department in need of the equipment order the equipment

The best evidence of continuous ownership of property

...

Best describes the auditors' typical observation of plant and equipment

The auditors observe major additions to plant and equipment made during the year

The following is used to obtain evidence that the client's equipment accounts are not understated

Analyzing repairs and maintenance expense accounts

The following is not a test primarily used to test property, plant and equipment accounts for overstatement

Vouching retirement of plant and equipment

The scope of audit procedures for the following account would be expected to decrease

Property, plant, and equipment

An auditor should expect the following to be most likely to indicate a departure from GAAP

Repairs have been capitalized to repair equipment that had broken down.

The following account is most likely that most of the audit work can be performed in advance of the balance sheet date

Property, plants, and equipment

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

Examination of deeds and title guaranty policies on hand

In violating company policy, Lowell Company erroneously capitalized the cost of painting its warehouse. The auditors examining Lowell's financial statements would most likely detect this when

Examining the construction work orders supporting items capitalized during the year

The auditor would most likely analyze the details to identify understatements of equipment acquisitions

Repairs and maintenance expense

The most important control procedure over acquisitions of property, plant, and equipment is

Using a budget forecast and control acquisitions and requirements

In examining PPE, the auditor tries not to determine

the adequacy of replacement funds

Property acquisitions that are misclassified as maintenance expense would most likely be detected by an internal control system that provides for

investigation of variances within a formal budgeting system

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