Analytical procedures are not widely used in the audit of property, plant and equipment. Which of the following is not a valid comment about the use of analytical procedures in the audit of PPE?
A) compare the annual depreciation charge with the cost of an asset to approximate the depreciation rate.
B) a substantial asset balance variation can be caused by one or a few transactions of which the auditor is likely to already be aware.
C) comparison of repairs expense with prior years may indicate capitalisation in error.
D) none of the above is invalid

Question

Quizplus · Accepted Answer

Analytical procedures are indeed used in the audit of property, plant, and equipment (PPE), and all the options provided are valid comments about their use. Comparing annual depreciation charges, investigating substantial asset balance variations, and comparing repairs expense with prior years are all analytical procedures that can provide insights into the accuracy and appropriateness of PPE accounting.

Analytical Procedures Are Not Widely Used in the Audit of Property