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Plant and Machinery - Valuation and Authorization
Valuation
Valuation is at depreciated historic costs. Auditor's duty is to make sure that the accounting policy for depreciation is suitable. Assuming an example whether the diminution in value of an asset is related largely to time it would not be suitable to require a reducing balance method since rather straight-line method should be required. The auditor has to make sure about the accounting policy is in accordance along with IAS 16. Whether he has to consider the needful lives of the assets are suitable and he has to verify that the calculations are correctly made.
Authorization and Cost
Significant plant and machinery acquired during the year is vouched to supporting documentation such as supplier's cash books, local purchase orders, invoices, approved budgets, etc. The auditor must ensure which the related expenditure that as carriage inwards, installation charges have been involved as suitable.
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