An Auditor Wishes to Test the Net Valuation of the Equipment

question 90

Multiple Choice

An auditor wishes to test the net valuation of the equipment in the financial statements of a client.How will the auditor best perform this testing?

• A)Vouch the recorded equipment to an invoice supporting the cost of the equipment when originally purchased.
• B)Compare the ID number on the fixed asset schedule to the identification tag on the asset itself.
• C)Recalculate annual depreciation expense for major additions and a sample of all other equipment.
• D)Confirm material equipment with customers.

---

Definitions:

Exclusive Federal Jurisdiction

Jurisdiction granted solely to federal courts in certain types of cases, meaning state courts do not have jurisdiction over these matters.

First-To-File

A principle in patent law where the first person to file a patent application for an invention is granted the patent, regardless of who first invented the item.

Patent Law

The area of law that deals with the protection of inventions, allowing the patent holder exclusive rights to the patented process, design, or invention for a certain period.

Copyright Laws

Legislations that protect the rights of creators over their original works, preventing unauthorized reproduction or distribution.