The auditor needs to gain reasonable assurance that the equipment accounts in the fixed asset master file are not understated. Which of the following accounts would most likely be reviewed in making that determination?
A) depreciation expense
B) repairs and maintenance expense
C) gains/losses on sales and retirements
D) cash

Question

Quizplus · Accepted Answer

Reviewing repairs and maintenance expense can help identify if any expenses were incorrectly classified instead of being capitalized as equipment, which would understate the equipment accounts.

The Auditor Needs to Gain Reasonable Assurance That the Equipment