The Auditor Is Testing for Unrecorded Retirements/disposals of Equipment

question 66

Multiple Choice

The auditor is testing for unrecorded retirements/disposals of equipment. Which of the following audit procedures would the auditor most likely use?

• A) Select items from the fixed asset master file and then physically locate them.
• B) Examine the repairs and maintenance amount for large debits.
• C) Compare current year's depreciation expense with the previous year's depreciation expense.
• D) Trace acquisition documents to the fixed asset master file.

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Definitions:

Empirical Claims

Claims that can be true or false depending on the facts.

Prove

To demonstrate the truth or existence of something through evidence or argument.

Confirmation Bias

The tendency to search for, interpret, and remember information in a way that confirms one's preconceptions.

Hypothesis

A proposed explanation made on the basis of limited evidence as a starting point for further investigation.