Assume that the audit team notes the client has made a significant change in its product line which requires that new equipment be purchased.Which of the following would be of greatest concern to the auditor?
A)Inappropriate book value of new equipment.
B)Impaired value of new equipment.
C)Impaired value of old equipment.
D)Inappropriate depreciation calculation for new equipment.

Question

Quizplus · Accepted Answer

The auditor would be most concerned about the impaired value of old equipment because the significant change in the product line and the purchase of new equipment could render the old equipment obsolete or less valuable, necessitating an impairment review.

Assume That the Audit Team Notes the Client Has Made