Académique Documents
Professionnel Documents
Culture Documents
Balance Sheet
Assets
Cash
Investments
Receivables
Prepaids
Inventory
PP and E
Other assets intangibles
Other Assets
Prepaid expenses current
Intangible assets long term
Property, plant and equipment long term
LO# 1
14-4
LO# 1
14-5
LO# 1
14-6
LO# 2
Rights
Valuation
Rights and
and
Valuation
Obligations
Obligations
Confirm
Determine
Confirm policy
policy
Determine unexpired
unexpired portion
portion
beneficiary
of policy and
beneficiary with
the
insurance
the insurance
insurance broker.
insurance expense.
expense.
Classification
Determine
Determine propriety
propriety of
of distribution
distribution between
between
manufacturing
manufacturing overhead
overhead and
and SG&A
SG&A expense.
14-7
LO#
1&2
LO#
1&2
14-9
LO#
1&2
Substantive Procedures
Intangible Assets
LO# 2
14-12
LO# 3
New Engagement
14-13
IT Department
From
purchasing
process
PP&E
transaction
file
Specialized
PP&E
transactions
LO# 3
PP&E
master
file
PP&E
program
Input
General
ledger
master file
General
ledger
program
General
ledger
report
PP&E
transaction
report
Review for
proper
recording
Reconcile to
general ledger
Monthly
PP&E
subledger
14-15
LO# 4
Types of Transactions
Four types of PP&E transactions may occur:
1. Acquisition of capital assets for cash or other
nonmonetary considerations.
2. Disposition of capital assets through sale,
exchange, retirement, or abandonment.
3. Depreciation of capital assets over their useful
economic life.
4. Leasing of capital assets.
14-16
LO# 5
Difficult-to-audit
transactions.
Misstatements
detected in
prior audits.
14-17
LO# 5
14-18
LO# 5
Difficult-to-Audit Transactions
When assets are purchased directly from a vendor,
the transaction is relatively easy to audit. However,
transactions involving donated assets,
nonmonetary exchanges, and self-constructed
assets are more difficult to audit.
14-19
LO# 5
14-20
LO# 6
14-21
LO# 6
LO# 7
14-23
LO# 8
LO# 9
14-25
LO# 9
January
4
2008
14-26
LO# 9
14-27
LO# 9
LO# 9
14-29
LO# 9
LO# 9
Classes
Classes of
of capital
capital assets
assets and
and valuation
valuation bases.
Depreciation
Depreciation methods and useful lives for financial reporting
reporting and
and tax
tax
purposes.
purposes.
Nonoperating
Nonoperating assets.
Construction
Construction or
or purchase
purchase commitments.
commitments.
Liens
Liens and
and mortgages.
mortgages.
Acquisition
Acquisition or
or disposal
disposal of
of major operating facilities.
facilities.
Capitalized
Capitalized and other
other lease
lease arrangements.
arrangements.
14-31
LO# 10
14-32
Questions
14-33
14-34