Exam (elaborations)
Exam (elaborations) AUE3761 - The Audit Process (AUE3761)
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AUE3761 ASSIGNMENT 3 SOLUTIONS
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AUE3761ASSIGNMENT NO 3
UNIQUE NUMBER 799318
THIS DOES NOT REPLACE YOUR OWN WORK!!
USE ONLY FOR REFERALS!!
DO NOT PLAGIARIZE
, QUESTION 1
With reference to the background information: Describe the substantive audit procedures
that you would conduct to obtain audit evidence in respect of: - the occurrence assertion
for additions and disposals of mini trucks. - the accuracy, valuation and allocation
assertion relating to the accumulated depreciation of mini trucks. Communication skills –
logical argument and appropriate style
1. Substantive audit procedures to obtain audit evidence in respect of the occurrence
assertion for additions and disposal of mini trucks
Additions
➢ Select a sample of additions of mini trucks from the fixed asset register and trace them to
capital budget, minutes of directors’ meetings and purchase requisitions for evidence of
authority for the acquisition of the mini trucks;
➢ Inspect mini trucks acquired during the year and cross-reference description, serial
number, etc., to purchase invoices, receipts obtained from suppliers or purchase contracts;
➢ Inspect the asset register and purchase documentation and verify that the registration
numbers of additions are not the same as the ones for mini trucks which were already
available prior to current year
; ➢ Inspect the purchase invoice or purchase contract to confirm that it they are made out to
Living Well (Pty) Ltd and is for the selected mini trucks and is signed; and
➢ Inspect payment records to confirm that payment was made for the mini trucks.
Disposals
➢ Inspect the disposal documentation, such as directors` meeting minutes used to approve
the disposal for an authorising signature;
➢ Trace the disposal by reference to the capital budget, confirm authorisation for the
disposal of the mini trucks;
➢ Trace the proceeds of the sale to the receipts` records or bank stamped deposit slip or
bank statement;
➢ Inspect the receipts and contracts of sell and confirm that they were generated by Living
Well (Pty) Ltd;
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