In the audit of property, plant, and equipment, auditors need to examine if the client has the right to record these assets as assets on the balance sheet. The auditor needs to examine any lease agreements associated with these assets to determine if the lease qualifies as a finance or an operating lease.

Question

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This statement is true. In the audit of property, plant, and equipment, auditors need to examine lease agreements associated with these assets to determine if the lease qualifies as a finance or operating lease to ensure that the client is recording these assets correctly on the balance sheet.

In the Audit of Property, Plant, and Equipment, Auditors Need