Which method might an auditor utilize in testing depletion expense?
A)using analytical procedures.
B)observation of the physical count.
C)obtaining management representation.
D)estimating the useful life of the natural resource.

Question

Quizplus · Accepted Answer

The auditor may utilize analytical procedures to test depletion expense, such as comparing the amount of depletion expense with the amount of natural resources extracted or examining trends in depletion expense over time. Observation of the physical count may be more applicable to inventory testing, obtaining management representation may be more applicable to financial statement assertions, and estimating the useful life of the natural resource may be more applicable to testing depreciation expense.

Which Method Might an Auditor Utilize in Testing Depletion Expense