When the auditor receivthe client-prepared schedulfor property, plant, and equipment assets, in order to determine that they booked the adjustments proposed by the auditor at the conclusion of the prior audit, the auditor should:
A) inquire of management.
B) examine the general journal for the first month of the current year.
C) inquire of accounting personnel.
D) compare beginning balances with prior year's working papers.

Question

Quizplus · Accepted Answer

Comparing the beginning balances with prior year's working papers is the best option as it provides a direct comparison of the assets in the current year with the assets in the prior year. This enables the auditor to determine whether the adjustments proposed in the prior year were made or not. Inquiring of management or accounting personnel may provide some information, but it may not be sufficient to confirm the accuracy of the asset balances. Examining the general journal for the first month of the current year may not be useful as it only provides information for the first month and may not reflect the adjustments made later in the year.

When the Auditor Receivthe Client-Prepared Schedulfor Property, Plant, and Equipment