1 review the policies for disposing of retiring

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1) Review the policies for disposing of/ retiring capital assets 2) Review the authorization policies for capital asset disposal/ retirements. 3) Review the policies for reporting items that are retired or abandoned. Make a note of how applicable gains/losses are recognized. 4) On a sample basis, select 5 retired capital assets from the fixed assets records and perform the following tests: Assess whether the assets retirement was properly approved and whether this was done on a timely basis. Establish whether record of the asset retired was properly removed from the general ledger and fixed asset register (if no longer in use) Check whether any applicable gains and losses were recognized and reported on a timely basis. 5) Ensure that only a specific employee/employees have access to the asset records for performing the asset retirement function.
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7. Depreciation 19) Test adequacy of depreciation provision. 1) Download file containing monthly depreciation run to excel (dependant on practicality) 2) Sort the spreadsheet by All assets with zero book value at beginning of the period Depreciation provided for the month. Ensure that depreciation provision not overstated by providing depreciation on assets with zero book value. 3) Sort the spreadsheet by: All assets with a book value at the beginning of the period All assets for which depreciation provision is zero Ensure that depreciation provision not understated by not providing depreciation for assets having a book value
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20) Test applicability of depreciation rates used 1) Compare depreciation rates per policy and procedure manual of VSE to that of the Vodacom Group. Ensure uniformity between the two. 2) Sort spreadsheet above by: Asset type/category Depreciation rates used 3) Review Fixed Assets policy documents and notes depreciation rates specified per asset category. 4) On a sample basis, assess whether correct depreciation rates have been used to calculate the depreciation provision.
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An audit procedure that examines the financial statements and supporting documentation to see if they contain errors. These tests are needed as evidence to support the assertion that the financial records of an entity are complete, valid, and accurate. Definition Substantive test
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Three Categories of Substantive Tests 1. Substantive Tests Of Transactions Test for fraud or errors in individual transactions. Provides evidence on occurrence, completeness and accuracy assertions. 2.Tests of Account Balances Establish whether there are any material misstatements in accounts or disclosures included in the financial statements by concentrating on the details in an account balance. 3. Substantive Analytical Procedures Substantive analytical procedures include evaluating financial information made by studying plausible relations among financial and non-financial data.
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  • Fall '17
  • Depreciation, Generally Accepted Accounting Principles, DAN PERALATAN

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