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Valuation of PPE
Revaluation Deprecation Opening Balance Additions Disposal
- Obtain valuation certificate - Review for its reasonableness - Correct to last year balance - Obtain list of additions, agree to NCA - Obtain list of additions, agree to NCA
& review for its reasonableness (useful life, residual value) register register
- Confirm revalue regularly - Reperform calculation - Inspect invoice - Obtain doc, inspect transfer title, price,
- Recast revaluation surplus agree to -Discuss with management if fluctuates - Review the capitalization of date, payment
revaluation reserve - Review profit& loss of disposal & expenditure (distinct with revenue exp) - Recast profit / loss on disposal
- Take sample of revalued assets, recast assess the depreciation policy - Review the proceeds is at market price
the charge of depreiation based on Ensure profilt/ loss is near to nil
revalued amount
Valuation of Inventory
Cost Net Realisable Value Disclosure
Purchase price Manufactured Good - Inquire management about slowing moving stock - Accounting policies
- Obtain sample of inventory and inspect to its purchase - Obtain sample of manufactured item and inspect to its should be written down - Amount recorded at NRV
invoice cost sheet - Attend stock count to identify slow moving stock
( raw material / labour cost / allocation of OH) - Amount write off as expenses
- Ensure appropriate basis of valuation - Examine selling price after YE, ascertain goods
(FIFO, LIFO, WACO) - Discuss with management on basis should be written down
- Review the variance statement
Valuation of Bank
Bank confirmation letter Bank statement Other Evidence
- External confirmation (reliable) - Perform cut off test to payment & receipt (no window dressing)\ - Overdraft
- Cover CERV - Trace unpresented/ uncredited cheque in bank reconciliation - obtain - Company assets held as security
How? explain - Share certificates
1. Draft bank confirmation letter - Inquiry items on bank statement
2. Obtain authorization from client - Personal guarantees connection with company loan
3. Send letter to bank -Inspect unusual item in cash book - Interest charge not yet recorded
4. Bank reply directly to auditor - Recast bank reconciliation
Valuation of cash ( MATERIAL - attend cash count)
Planning During cash count After cash count
- Record time/location/ audit staff/ client staff to count - count cash in front of official responsible - Reconcile any different between record and count
- Ensure cash book are up-to-date - Enquire into I owe you cash (IOUs) - Ensure IOUs have been reimbursed
- Agree cash balance to SOFP - Agree to SOFP