Q10. Which of the following is NOT true in auditing property, plant and equipmen

Question

Q10. Which of the following is NOT true in auditing property, plant and equipment? A. Transactions involving donated assets, nonmonetary exchanges, and self-constructed assets may be difficult for auditors to verify the trade-in value or properly audit the cost accumulation. B. When accepting a new engagement, auditor should only focus on his or her efforts on the current year's activity because the assets acquired in the earlier years were subjected to audit procedures at the time of acquisition. C. In order to test the completeness assertion on PP&E; transactions, auditors would trace a sample of fixed asset purchase requisitions to receiving reports and the fixed asset subsidiary ledger, and also review the related repair and maintenance expense accounts. D. Regardless of the valuation method used, an impairment loss resulting from a decline in fair value that is other than temporary may need to be recorded, and the auditor should evaluate the management's basis for the decision.

Explanation / Answer

Q10.

Ans B

When accepting a new engagement, auditor should only focus on his or her efforts on the current years activity because the assets acquired in the earlier years were subject to audit procedures at the time of acquisition

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