Which of the Following Audit Procedures Would Be Least Likely

question 54

Multiple Choice

Which of the following audit procedures would be least likely to lead the auditor to find unrecorded fixed asset disposals?

• A)Examination of insurance policies for evidence of a dropped or cancelled policy.
• B)Review of repairs and maintenance expense.
• C)Review of property tax files.
• D)Scanning of invoices for fixed asset additions for evidence of a purchase to replace a previously owned fixed asset.

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Definitions:

Valuation Techniques

Methods and approaches used to determine the fair value of an asset, liability, or a company, based on assumptions of future cash flows, market trends, or comparative assets.

Fair Value Approach

An accounting method that measures assets and liabilities at estimates of their current market value rather than historical cost.

Quoted Prices

The prices of securities that are publicly listed and available for investors to buy and sell.

Active Markets

Markets where transactions for assets or liabilities occur with sufficient frequency and volume to provide pricing information on an ongoing basis.