Examination of property tax files
Inquiry of plant manager
Examination of debits to accumulated depreciation
All of the above
Answer is Right!
Answer is Wrong!
The correct answer is D. All of the above.
An analysis of fixed assets account has revealed possibility of unrecorded sale of plant and machinery. The following audit procedures may be adopted to discover it:
- Examination of property tax files: This will help to determine whether the property taxes have been paid on the assets. If the assets have been sold, the property taxes should no longer be payable.
- Inquiry of plant manager: The plant manager can be asked about any sales of plant and machinery that have taken place.
- Examination of debits to accumulated depreciation: This will help to determine whether any assets have been written off. If assets have been sold, they should be written off the books.
All of these procedures are necessary to ensure that all sales of plant and machinery have been recorded.