The auditor may conclude that depreciation charges are insufficient by noting:
A)large amounts of fully depreciated assets.
B)insured values greatly in excess of book values.
C)excessive recurring profits on assets retired.
D)continuous trade-ins of relatively new assets.

Question

Quizplus · Accepted Answer

Excessive recurring profits on assets retired may indicate that the depreciation charges were insufficient, as the assets were not depreciated enough to reflect their true value at the time of retirement.

The Auditor May Conclude That Depreciation Charges Are Insufficient by Noting