The Statement About Audit Strategy for Property, Plant and Equipment

question 35

Multiple Choice

The statement about audit strategy for property, plant and equipment that is inaccurate is:

• A) for depreciation and accumulated depreciation inherent risk is affected by the difficulty in estimating both useful lives and residual value
• B) although material, verification of PPE typically involves significantly less time and cost than verification of current assets.
• C) unlike current asset accounts, control risk assessments for PPE asset balances are less dependent on controls over major transaction classes.
• D) none of the above statements is inaccurate

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Definitions:

Pahoehoe Lava

A type of basaltic lava flow with a smooth, unbroken surface that resembles ropey or wrinkled skin, flowing more fluidly than other types.

Aa Lava

A type of lava flow characterized by a rough, jagged surface formed when more viscous lava cools and solidifies.

Vesicles

Small cavities in volcanic rocks that were formed by gas bubbles during the solidification of the rock.

Caldera Eruption

A volcanic eruption characterized by the collapse of land following a massive explosion, leaving a large, basin-shaped depression.