ACCA AA Syllabus D. Audit Evidence - Non-current Assets - Tangible - Notes ^{16 / 18}

Completeness

(Not so important, but test for understatement)

• Get the NCA register (showing cost, additions, disposals, revaluations, impairments, depreciation)

• Check the opening balances agree to FS P/Y

• Check a sample of assets that definitely exist to the register

• Check register to ledger balances

Existence

Important check here for overstatement

• Physically inspect a sample from the register

• Check the sample assets are in use (and their current condition)

• Investigate any assets not physically found

Valuation

• Land and buildings Cost
  Check to purchase invoices
  Look for directly attributable costs (such as professional fees and delivery). 
  Check split between land, buildings and equipment

• Equipment and vehicles cost 
  Check to the purchase invoices

Depreciation and impairment

• Check rate used (type of asset / UEL & RV)

• Ensure consistency of method used

• Check accumulated depreciation on disposals has been removed correctly

• Check depreciation on additions in year is pro-rata

• Check for any indicators of impairment

• Check arithmetical accuracy

• Check any fully depreciated assets are no longer depreciated

• Analytical procedures:   
  Ratio of depreciation to total asset value
  Compare totals to P/Y

• Confirm adequate insurance cover

Rights and obligations

• Land and buildings
  Inspecting legal documents, contracts & agreements

• Vehicles
  Examine vehicle registration documents

Presentation and disclosure

• Ensure they are correct and clear

• Ensure the schedule of tangible NCA agrees to the figures in the FS

Additions

• Get a list in your fist and ensure nothing's missed :)

• Check authorisation for the additions

• Check to total additions in FS

• Check to invoice (in company name)

• Physically inspect a sample

• Ensure includes no items that should be in P&L (revenue items)

Disposals

• Get a list in your fist and give it a kiss

• Check authorisation of the disposals

• Check cost and accumulated depreciation of disposals has been removed

• Check calculation of profit/loss on disposal

• Check accounting is correct