Which of the following best describes the independent auditors' approach to obtaining satisfaction concerning depreciation expense in the income statement?

Question

Quizplus · Accepted Answer

The independent auditors' approach to obtaining satisfaction concerning depreciation expense in the income statement is to establish the basis for depreciable assets and verify the depreciation expense. This means the auditors will ensure that the assets being depreciated should be depreciable under GAAP, and the amount of depreciation expense charged to income should be accurate and appropriate based on the assets' useful lives and depreciation method. Option A refers to verifying the mathematical accuracy of the amounts charged to income, which is part of the auditors' procedure for all items on the income statement, not just depreciation expense. Option B refers to determining the method used to compute depreciation, which is important but not the only factor in verifying the appropriateness of depreciation expense. Option C refers to reconciling the amount of depreciation expense to the amounts credited to accumulated depreciation accounts, which is also an important step in the audit, but not the only one for verifying the appropriateness of depreciation expense. Therefore, Option D is the best choice.

Which of the Following Best Describes the Independent Auditors' Approach