Property, plant, and equipment is present, at least to some extent, in virtually all audit clients. Auditing the area can be straight forward but when an entity is building machinery or equipment, complexities arise. Property and equipment can also include right of use assets under lease agreements. This module will address assessing the risk of property and equipment, internal controls that prevent and detect misstatements in property and equipment, auditing techniques responsive to the assessed risk and disclosure. (Please Note: This module is part of Surgent's Audit Skills Training: Level 1.)
Learning Objectives
- Discuss audit risks related to property equipment
- Identify internal controls to prevent, detect and correct misstatement in property and equipment
- Tailor an audit plan to respond to assessed risk of material misstatement
- Understand the key controls related to PP&E
- Describe and apply lease accounting requirements
- Test disclosures for completeness and compliance with GAAP
Major Topics
- Assessing risk
- Internal control related to property and equipment
- Audit procedures for property and equipment
- Construction of assets including capitalizing interest
- Lease accounting requirements and disclosure of right of use asset
- Disclosure of property and equipment
