Audit Procedures for Non-Current Assets (6)

Question 1

Additions (inspection)

Answer 1

Verify additions by inspection of architect’s certificates, solicitor’s completion statements, supplier’s invoices

Question 2

Additions (Review expenditure)

Answer 2

Review capitalisation of expenditure by examining for non-current assets additions and items in relevant expense categories

Question 3

What should review capitalisation of expenditure ensure?

Answer 3

Capital/revenue distinction is correctly drawn

Capitalisation is in line with consistently applied company policy

Question 4

Additions (purchases allocated)

Answer 4

Inspect non-current asset accounts for a sample of purchases ensuring they have been properly allocated

Question 5

Additions (recorded by scrutinisng)

Answer 5

Verify that additions have been recorded by scrutinising the non-current asset register and general ledger