Audit Procedures for Non-Current Assets (4)

Question 1

Valuation depreciation (charged on all assets)

Answer 1

Review non-current assets to ensure that depreciation has been charged on all assets with a finite useful life

Question 2

Valuation depreciation (revalued assets)

Answer 2

For revalued assets, ensure that the charge for depreciation is based on revalued amount by recalculating it for a sample of revalued assets

Question 3

Valuation depreciation (depreciation rates)

Answer 3

Reperform calculation of depreciation rates to ensure it is accurate

Question 4

Valuation depreciation (ratios)

Answer 4

Compare ratios of depreciation to non-current assets with:

Previous years and depreciation policy rates

Question 5

Valuation depreciation (scrutinise depreciation policies)

Answer 5

Scrutinise draft accounts to ensure that depreciation policies and ratios are disclosed in the accounts

Question 6

Classification (review disclosures financial statements)

Answer 6

Review non-current asset disclosures in the financial statements to ensure they meet IAS 16 criteria

Question 7

Classification (fully depreciated assets)

Answer 7

For a sample of fully depreciated assets, inspect the register to ensure no further depreciation is charged

Question 8

Disposals (verify disposals documentation)

Answer 8

Verify disposals with supporting documentation, checking transfer of title, sales price and dates of completion of payment

Question 9

Disposals (recalculate disposal)

Answer 9

Recalculate gain or loss on disposal

Question 10

Disposals (proceeds)

Answer 10

Consider whether proceeds are reasonable

Question 11

Disposals (security)

Answer 11

If asset was used as security, ensure release from security has been correctly made