– Ownership: The auditor needs to verify that there was authority issued for the purchase of an asset by the company.
– Cost: The auditor should verify the cost as given by comparing it with manufacturer or dealers.
– Valuation: This assurance will be acquired by ensuring appropriate depreciation has been charged, so that valuation at year end is reasonable.
– Existance: By physically inspecting the assets, noting down their details.
– Presentation and Disclosure: Here the auditor analysis the classification of the assets,noting distinction between leased assets (if any) and fully owned assets as disclosed in the Balance Sheet.
– In the event of disposal, the auditor should verify issuance of authority to dispose,reason ability of disposal price and correct recording.
– Check receipt of the disposal price and proper recording in the records.