Which audit procedure is most appropriate for checking the mathematical accuracy of depreciation expense?
Correct answer: B. Recalculating depreciation using asset records
- A. Inspecting board meeting minutes
- B. Recalculating depreciation using asset records
- C. Confirming balances with trade creditors
- D. Observing the physical inventory count
Explanation
Recalculation independently checks the mathematical accuracy of an amount recorded in the accounts. The other procedures provide evidence about different matters, such as authorisation, liabilities, or inventory existence.
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Auditing examines accounting records and financial statements to determine whether they present a reliable and fairly stated position. The subject covers audit objectives, internal controls, audit evidence, materiality, vouching, verification, working papers, auditor independence, audit reports, and the distinction between an audit and accounting or investigation.
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