Reference no: EM132429253

Question - Expense Transaction Risk

Sinha Airways owns many of its aircraft. The useful lives and residual values may be influenced by external changes to economic conditions, demand, and new technology. Analytical procedures show that depreciation expense is down by 8% compared to prior years.

Required -

1. Evaluate inherent risk for depreciation expense.

2. Discuss what can go wrong.

3. Suggest an internal control that management might put in place to control the appropriate recording of depreciation expense.