Which of the following statements about the audit of fixed assets is the least correct?
A) The primary accounting record for manufacturing equipment and other property, plant and equipment is generally a fixed asset master file.
B) Manufacturing equipment and current assets are normally audited in the same fashion regardless of the activity within a particular account.
C) The emphasis on auditing fixed assets is on verification of current-period acquisitions.
D) Failure to record the acquisition of a fixed asset affects the income statement until the assets are fully depreciated.

Question

Quizplus · Accepted Answer

Manufacturing equipment and current assets are not normally audited in the same fashion, as they have different characteristics and risks associated with them. Current assets tend to be smaller and more frequent transactions, while manufacturing equipment and fixed assets tend to be larger and less frequent transactions. The audit of fixed assets is also not solely focused on verification of current-period acquisitions, as auditors must also consider issues such as impairment, disposals, and the accuracy of depreciation calculations. The other statements are generally correct.

Which of the Following Statements About the Audit of Fixed