Auditing and Assurance Services 9th Edition by Alvin Arens,Mark Beasley,Randy Elder

Exercise 3

Which of the following internal controls is most likely to justify a reduction of control risk concerning plant and equipment acquisitions?
A) Periodic physical inspection and reconciliation of plant and equipment to the detailed accounting records by the internal audit staff.
B) Comparison of current-year plant and equipment account balances with prior-year actual balances.
C) Review of prenumbered purchase orders to detect unrecorded trade-ins.
D) Approval of periodic depreciation entries by a supervisor independent of the accounting department.