The auditor's starting point for verifying disposals of property, plant and equipment is the:
A) equipment subsidiary ledger.
B) equipment account in the general ledger.
C) client's schedule of recorded disposals.
D) file of shipping documents.

Question

Quizplus · Accepted Answer

The client's schedule of recorded disposals provides a list of all disposals that the client claims to have made during the period under audit. This is the starting point for the auditor to verify the disposals. The auditor can then obtain supporting documentation for each disposal, such as sales invoices, asset removal authorizations, and other relevant documentation. This will allow the auditor to verify that the disposals have been properly recorded and that the proceeds from the disposals have been accurately reflected in the financial statements. The other choices, such as the equipment subsidiary ledger, equipment account in the general ledger, and file of shipping documents, may be used as supporting documents, but they are not the starting point for verifying disposals.

The Auditor's Starting Point for Verifying Disposals of Property, Plant