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Property, Plant & Equipment

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46 views6 pages

Property, Plant & Equipment

Uploaded by

rizwan.rasg
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd
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Audit Program WP Ref.

:
Prepared by: Rizwan Ahmad
Date:
Reviewed by
Date
Client: Institute of Rural Management (CPFT)
Period: June 30, 2024
Subject: Property, plant and equipment

Amount in Rs.
Account balances:
Property, plant and equipment

Classes of transactions:
Depreciation
Loss / (gain) on disposal of property, plant and equipment

S. No. Audit Objectives Assertions Risk Assessment

IR CR ROSM

1. Fixed assets are completely and accurately CA


recorded.

2. All recorded fixed assets actually exist. E

3. Fixed assets are recorded at appropriate V


values.

4. Fixed assets recorded are owned by the R


client and title is also in the name of client.

5. Depreciation expense and gain / loss on OCATL


disposal has been accurately calculated and
appropriately disclosed.

6. Fixed assets are presented and all OCAL


disclosures have been given in accordance RVU
with the Fourth Schedule of the Companies
Act, 2017 and relevant IFRSs.
S. No. Audit Procedures Objective Done by W. P. Ref.

Test of Controls

1. Assess the reasonableness of design of ALL


system of internal control by enquiring
relevant client personnel and documenting
the same (if not a documented system
manual has been developed by the client).
A walk through test would be necessary to
confirm the understanding as documented.
Identify the preventive (exercised before
incurrence of transactions and event) and
detective (exercised after incurrence of
transactions and event) controls
established by management to support its
assertions.

2. Check on sample of selected transactions ALL


covering the whole period that all
preventive controls are exercised on all
transactions.

3. Check that proper fixed assets register has ALL


been maintained and entries are made in
the register on prompt and consistent basis
and the same is reconciled with general
ledger and physically verified assets on
periodical basis in accordance with TR-6 of
ICAP.

4. Check on a sample of transactions that CE


detective controls are appropriately been
exercised and in case of any detection of
error/ fraud, proper steps have been taken
to avoid recurrence of the same.

5. Ensure that management does not override


the designed controls by

n Enquiring from the designated staff


person

n Remain skeptical during performing


test of design and test of effective
operation

6. Document the conclusion after performing


test of controls and required level of
assurance from substantive procedures.
S. No. Audit Procedures Objective Done by W. P. Ref.

Analytical Procedures

1. Assess the appropriateness of depreciation U


method and rate in view of the flow of
economic benefits and life of the assets.

2. Check the reasonableness of depreciation CAL


expense by applying depreciation rate to
closing cost / carrying value as per the
method adopted.

3. Document logical commercial reasons for AU


major additions and disposals made during
the year.
S. No. Audit Procedures Objective Done by W. P. Ref.

Test of Detail

1. Obtain movement schedule of tangible fixed CEA


assets both for cost and accumulated
depreciation. Check casting and cross
casting of the schedule.

2. Trace opening balances from fixed assets CE


register, general ledger and last year’s
working papers.

3. Make a selection of fixed assets held by CEV


client at year-end and physically inspect
them to ensure that:

(a) Asset is owned and held by client.

(b) Remaining useful life appears to be


correct.

4. For selected additions during the current CEV


period:

(a) For purchases in current year, capital


expenditure approvals and vendor’s
invoices.

(b) Ensure that additions to fixed assets


do not include any amount of a nature
of revenue expenditure.

(c) Ensure that where full payment has


not been made for what so ever
reason, asset is recorded at full cost
and balance has been recognized as
liability.

5. For selected assets disposed of during the OAL


current period:

(a) Examine documents authorizing


disposal.

(b) Examine documents supporting


amounts for which assets were sold
e.g. cash receipts.

(c) Calculate gain or loss on disposal of


fixed assets.
S. No. Audit Procedures Objective Done by W. P. Ref.

6. To check depreciation expense: OCAL

(a) Determine the reasonableness of


accounting policy and depreciation
method, rates and their consistency
with prior years.

(b) Check calculation of depreciation of


selected assets.

(c) Assess the reasonableness of


allocation to manufacturing costs,
admin costs, etc.

7. Ensure that none of the assets is impaired V


or the recoverable amount of an asset is not
less than its carrying amount. If the
carrying amount of an asset is more than its
recoverable amount, that same should be
reduced to recoverable amount recognising
the reduction as impairment loss.

Ensure that any subsequent addition


should be depreciated over remaining life
and not simply depreciated by applying the
depreciation rate.

8. Inspect evidence of ownership e.g. vehicle R


registration, property documents,
machinery import documents, etc.

9. For additions in leased assets during the CEKR


year, check from lease agreements that the
lease is a finance lease in substance.

10. Ensure that depreciation on leased assets is OCV


calculated on the same rates as for owned
assets.

If there is no reasonable certainty that the


lessee will obtain ownership by the end of
the lease term, the assets should be fully
depreciated over the shorter of the lease
term or its useful life.

11. For selected transfers to fixed assets from K


capital work-in-progress during the year,
check contractor certificates of completion
of project and proper approval thereof and
examine the stage of completion.
S. No. Audit Procedures Objective Done by W. P. Ref.

12. For items stuck-up for considerable period V


of time, inquire about its status from the
management. Compute provisions if
required and ask for management
representations.

13. In case of revalued assets ensure that V

n Entire class of assets has been revalued


on periodical basis
n Any asset's revaluation results in deficit
should not be adjusted against other
assets' surplus but should be
immediately charged.
14. Ensure that closing balances as per our N/A
working paper file are in match with
general ledger.

15. Determine that disclosures have been made OCAL


in accordance with the requirements of RVU
Fourth Schedule to the Companies Act,
2017 and the applicable IFRSs.

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