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THE INSTITUTE OF FINANCE MANAGEMENT
FACULT OF ACCOUNTING, BANKING AND FINANCE BACHELOR OF ACCOUNTANCY GROUP ASSIGNMENT AUDITING (AC 732)
NAMES; REGISTRATION NO;
HEZEKIA DAVIS BAC/11/57562
HASHIMU MADEMBWE BAC/11/58085
QUESTION
Describe the Audit Procedure of the following;- (1) Non Current Assets (2) Current Assets * Stock * Petty Cash * Payroll * Accounts Payables
AUDITING PROCEDURE FOR NON CURRENT ASSET
Audit objectives * The auditor will be aiming at proving the following assertions; * Proper authorization to acquire the asset * Valuation * Existence * Ownership rights * Presentation and disclosure
Cost
The significant plant and machinery acquired during the year is vouched to supporting documentation such as supplier’s invoices, cashbooks, approved budgets etc.
Authorization
Check in the directors’ minutes or AGM minutes for proper authorization for acquisition of the asset.
Valuation
Auditor’s responsibility is to ensure that the accounting policy for depreciation is appropriate. For example if the diminution in value of an asset is largely related to time then reducing balance method would not be appropriate but straight-line method. Check appropriateness of the useful life. Where the assets have been revalued the auditor should ascertain that an independent and qualified value carried out this revaluation.
Existence
Existence should be checked by physical inspection. The problem arises that items of plant & machinery are mobile, numerous, portable and valuable. It becomes difficult therefore for the auditor to be assured that the value attached to the plant and machinery represents plant and machinery that actually exist at balance sheet date. To ensure the existence of plant and machinery, it is necessary to have a
FACULT OF ACCOUNTING, BANKING AND FINANCE BACHELOR OF ACCOUNTANCY GROUP ASSIGNMENT AUDITING (AC 732)
NAMES; REGISTRATION NO;
HEZEKIA DAVIS BAC/11/57562
HASHIMU MADEMBWE BAC/11/58085
QUESTION
Describe the Audit Procedure of the following;- (1) Non Current Assets (2) Current Assets * Stock * Petty Cash * Payroll * Accounts Payables
AUDITING PROCEDURE FOR NON CURRENT ASSET
Audit objectives * The auditor will be aiming at proving the following assertions; * Proper authorization to acquire the asset * Valuation * Existence * Ownership rights * Presentation and disclosure
Cost
The significant plant and machinery acquired during the year is vouched to supporting documentation such as supplier’s invoices, cashbooks, approved budgets etc.
Authorization
Check in the directors’ minutes or AGM minutes for proper authorization for acquisition of the asset.
Valuation
Auditor’s responsibility is to ensure that the accounting policy for depreciation is appropriate. For example if the diminution in value of an asset is largely related to time then reducing balance method would not be appropriate but straight-line method. Check appropriateness of the useful life. Where the assets have been revalued the auditor should ascertain that an independent and qualified value carried out this revaluation.
Existence
Existence should be checked by physical inspection. The problem arises that items of plant & machinery are mobile, numerous, portable and valuable. It becomes difficult therefore for the auditor to be assured that the value attached to the plant and machinery represents plant and machinery that actually exist at balance sheet date. To ensure the existence of plant and machinery, it is necessary to have a
References: American Institute of Certified Public Accountants.” Accounting and Auditing Research”, in Professional Training program; Taking Charge of small engagements, Level 11. New York; AICPA, 1981. Gale, A “A Breakthrough in Disclosure Retrieval. ” Journal of Accountancy (September, 1978) David N. Ricchiute “Auditing Concepts and Standards”