When Substantiating Disposals of Property, Plant and Equipment, the Auditor

question 16

Multiple Choice

When substantiating disposals of property, plant and equipment, the auditor should be able to find evidence using all of the following except:

• A) cash remittance advices.
• B) written authorisations.
• C) supplier invoices.
• D) sales agreements.

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Definitions:

Operating Activities

Operating activities include the primary revenue-generating activities of an organization as reflected in its cash flow.

Inventory Account

An account representing the total cost of all unsold goods held by a company, including raw materials, work-in-progress, and finished goods.

Depreciation Expense

The distribution of a physical asset's cost over its lifespan, which mirrors the reduction in its value as time progresses.

Comparative Balance Sheet

Financial statements that present the balances of assets, liabilities, and equity at different points in time for comparison purposes.