Immersing in audit

  The item “Property, Plant and Equipment” is often material in the company’s statement of financial position. Revaluation relates to assertions about account balances, and related disclosures, at the period end such as accuracy, valuation and allocation . Why do auditors use assertions? When auditing revalued PP&E auditors may perform the following audit procedures: 1. Considering reasonableness of valuation, reviewing: · The competence, capabilities and objectivity of the expert. · Scope of work. · Methods, assumptions and data used. What is the management`s expert and how does the auditor use the management`s expert work? 2. Checking the valuations are regularly updated. 3. Verifying amounts in the financial statements with the valuer’s report. 4. Confirming the entire class of property, plant and equipment to which that asset belongs is revalued. 5. Reperforming calculation of revaluation surplus. 6. Checking the accounting for the rise or fall in val...

  Alternative procedures are additional audit tests used by auditors when the planned original set of audit procedures cannot be performed or are considered to be ineffective. The original procedures which auditors usually plan to perform to get audit evidence are inspection, observation, external confirmation, recalculation and inquiry. ISAs allow the use of alternative procedures in audit of  inventory, accounts payable, accounts receivable  as well as in the audit of  claims and litigation . For  accounts receivable  balances, the example of alternative procedures is examining specific subsequent cash receipts, shipping documentation, and sales near the period end. For  accounts payable balances,  the example of alternative procedures is examining subsequent cash disbursements or correspondence from third parties, and other records, such as goods received notes. As for  inventory,  in some cases where attendance of auditors at p...