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You are set to do an audit of the fixed assets.

  1. Please describe audit tests that you would perform for additions and retirements to fixed assets and depreciation expense (one for each category).
  2. Does it make a difference if the company does an annual physical inventory of assets?
  3. Describe 3 internal control procedures that you feel are the most important for fixed assets and what impact they would have on your audit.
  4. Define asset impairment and the key issues that would need to be addressed within your audit if you encounter asset impairment.

Describe the recoverability test and how it is used.

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