CPDStore Ireland

Tangible assets are often one of the largest figures on the balance sheet, yet audit work in this area is too easily treated as routine. Regulators and audit inspection teams repeatedly identify weaknesses in how firms test existence, ownership, valuation and impairment, and the revised requirements on auditing accounting estimates have raised the bar for testing depreciation, useful lives and revaluations. At the same time, economic pressures, volatile property markets and changing patterns of asset use mean impairment indicators are more common and more judgmental than ever.

This session takes a fresh and practical look at auditing tangible assets, moving beyond the standard checklist approach to focus on the areas where misstatements and inspection findings actually arise. You will come away with sharper procedures, better documentation habits and greater confidence in challenging management's judgements. For your practice, this means more efficient audit files that stand up to review. For your clients, it means an auditor who can engage credibly on capitalization decisions, revaluations and impairment.

Lungi Sepotokele covers the following topics during this course: 

• Getting the foundations right: understanding the client's asset base, capitalisation policies, the boundary between capital and revenue expenditure, and risk assessment for tangible assets under ISA (UK) 315.
• Existence and ownership: designing effective physical verification procedures, testing additions and disposals, verifying title to land, buildings and vehicles, and dealing with assets held at third-party locations.
• Depreciation and useful lives as accounting estimates: applying ISA (UK) 540 to depreciation methods, rates and residual values, and challenging management's assumptions with appropriate professional scepticism.
• Valuation, revaluations and impairment: auditing revalued assets, using the work of management's experts under ISA (UK) 500 and auditor's experts under ISA (UK) 620, identifying impairment indicators and testing impairment reviews.