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week four audit 2 individual

week four audit 2 individual - 17-22 Internal controls for...

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17-22 Internal controls for plant assets Harris, CPA, has accepted an engagement to audit the financial statements of Grant Manufacturing Co., a new client. Grant has an adequate control environment and a reasonable segregation of duties. Harris is about to assess control risk for the assertions related to Grant's property and equipment. Required Describe the key internal control structure policies and procedures related to Grant's property, equipment, and related transactions (additions, transfers, major maintenance and repairs, retirements, and dispositions) that Harris may consider in assessing control risk. KEY INTERNAL CONTROL STRUCTURE POLICIES THAT HARRIS SHOULD CONSIDER: Additions: (Property and Equipment): 1. The department getting the property and equipment needs to identify the property and equipment that it needs to purchase using an account code that is created at the time of purchase; 2. The purchase needs to be authorized by a person who is designated to give such permission and the person should not belong to the purchasing department. 3. The item description will be used by property and equipment control system to add the property and equipment to Grant's fixed asset system; 4. The property and equipment control will physically place a tag on the items that are added / bought and add extra information to its records.
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