The auditor would conclude that the client was not depreciating the cost of fixed assets rapidly enough if there were a large number of losses on the disposals of assets.

Question

Quizplus · Accepted Answer

If a client consistently incurs large losses on the disposal of assets, it may indicate that the assets were not depreciated sufficiently during their useful life, leading to a higher book value than the actual market value at the time of disposal.

The Auditor Would Conclude That the Client Was Not Depreciating