Auditing Fixed Asset

Agung Tri Atidhira

Farah Cynthia
Gavandy Alvidy
Raditya Pratama

Yohana

Audit Objective
To make sure that the fixed assets are recorded and presented fairly

Acquisition
Audit Risk

Assertion

The Transaction did not occur

Existence and Occurrence

The Fixed asset did not recorded properly in the

journal/ledger

Completeness

The fixed asset does not belong to the company

Right and Obligation

The fixed asset does not recorded fairly

Valuation and Allocation

Disposal
Audit Risk

Assertion

There was fake disposal

Existence and Occurrence

The value of asset is overstated

Valuation and Allocation

The asset still held by the company even though

already disposed

Right and Obligation

Repair and Maintenance

Audit Risk

Assertion

Miscalculation of Depreciation

Valuation and Allocation

Inconsistency in using depreciation method

Valuation and Allocation

Depreciation Expense
Audit Risk

Assertion

Miscalculation of Depreciation

Valuation and Allocation

Inconsistency in using depreciation method

Valuation and Allocation

1.

Obtain an understanding of the entity and its environment and determine the
significance of plant asset, and changes in plant assets, to the entity

2.

Trace beginning balance for plant asset and accumulated depreciation to prior
years working papers.

3.

Obtain client-prepared schedules of plant asset acquisition, disposal, and

depreciation expense, and determine that they are accurately represent the
underlying accounting records.

4.

Develop an expectation for plant asset using knowledge of the industry and the
entitys business activity

5.

Vouch plant asset acquisition and disposal to supporting documentation

6.

Vouch a sample of entries to repairs and maintenance expense

7.

Vouch the recording of new capital lease and operating lease to underlying contract

8.

Inspect the plant asset

9.

Examine title documents and contract

10. Evaluate

the fair presentation of depreciation expense by evaluating the

appropriateness of useful lives and estimated salvage value

11. Determine that plant asset and related expenses, gains, and losses are properly

identified and classified in the financial statement

12. Determine the appropriateness of disclosures related to the cost, book value,

depreciation method, and useful lives of major classes of plant assets, and the
terms of contract