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In performing a search for unrecorded retirements of plant assets, an auditor most likely would

A. Tour the facilities and then inspect the entity's plant asset ledger along with insurance and tax records.
B. Analyze the entity's repairs & maintenance account and then tour the plant facilities.
C. Tour the facilities and then analyze the repairs and maintenance account.
D. Inspect the entity's plant asset ledger along with insurance and tax records, and then tour the facilities.

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Final answer:

An auditor searching for unrecorded asset retirements would most likely analyze the repairs & maintenance account and then tour the plant facilities to verify the physical existence of assets and to cross-check with the ledger records.

Step-by-step explanation:

In performing a search for unrecorded retirements of plant assets, an auditor most likely would analyze the entity's repairs & maintenance account and then tour the plant facilities. This approach allows the auditor to first identify any large expenditures that might suggest an asset has been retired or replaced. Reviewing the repairs and maintenance account provides insight into whether an asset has incurred significant costs that could render it no longer in service. Following this analysis, a physical tour is a practical step to confirm the existence or non-existence of the asset in question and to check for any inconsistencies between the asset ledger and physical assets.

Alternatively, an auditor may choose to tour the facilities first to gain an understanding of the physical assets before analyzing the financial records. However, since the question favors a most likely approach, direct analysis of the financial accounts followed by physical inspection is typically considered a more systematic and effective audit procedure in detecting unrecorded retirements.

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