How vouch for Payments for acquisition of assets

Auditing and Assurance Revision Questions and Answers

The purchase of an asset must be duly supported by the receipt for the amount paid. In case of an immovable property, verify the title deeds and it passes only on registration. The transfer to sale of property has to be verified by a solicitor or an advocate. It is necessary for the auditor to satisfy himself generally as regards existence, value and title of the assets acquired. Verify that the assets were purchase only by the authorized person. In the case of constructed or a plant or a machinery manufactured by the concern with its labour and materials, it must be verified that the cost of labour, materials and other direct expenses incurred has been charged as cost of the asset on a proper allocation of the total expenditure debited under these heads. It must also be seen that neither expenses on repairs and maintenance have been capitalized nor the cost of additions to assets charged off as revenue expenses.

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