An auditor wishes to test the net valuation of the equipment in the financial statements of a client.How will the auditor best perform this testing?
A)Vouch the recorded equipment to an invoice supporting the cost of the equipment when originally purchased.
B)Compare the ID number on the fixed asset schedule to the identification tag on the asset itself.
C)Recalculate annual depreciation expense for major additions and a sample of all other equipment.
D)Confirm material equipment with customers.

Question

Quizplus · Accepted Answer

Recalculating annual depreciation expense helps verify the accuracy of the net book value of the equipment, which is crucial for testing the net valuation in the financial statements.

An Auditor Wishes to Test the Net Valuation of the Equipment