Question

Suggest three key procedures involving internal control of property, plant, and equipment that do not relate specifically to accounting records.

Answer 1

internal control is a process for assuring an organization's objective in operation, efficiency, reliable financial statement reporting, and compliance with law, regulation and policies.

there are many procedures that are done for the property plant and equipment.

the auditor of the company evaluates the effectiveness of internal control i=relating to property plant and equipment, there are many factors which are covered under this procedure.

segregation of duties -the auditor foresee whether there us proper segregation of various duties relating to property plan]t and equipmrnt.the auditor can also check whether the duties relating to property plant and equipment is rotated periodically or not.some of the factors that the auditor check is whether the transaction is recorded properly or not.

an authorization-the auditor can also check the control relating to capital budgeting, the weather this is don't on the proper format, and properly communicated, and approved by top-level management.

the company must lay out the proper procedure for the acquisition of a fixed asset, and ensure the -purchase is made with reasonable price, and approved by top-level managers.

weather periodic comparison with the actual expenditure of property plant and equipment is compared with budgeted capital expenditure.to check whether there is any variance is there. and any major variance must be examined by the management.

the recording-the The auditor must also check whether the company maintains proper records of fixed assets. asset ledger is also important to ensure every detail about the property plant and equipment is recorded in the records.

weather the expenditure incurred is properly allocated between capital and revenue.

the auditor will see whether there is an internal audit for property plant and equipment is present in the organization.the auditor must also check the scope of the work of internal auditor and audit committee.