Question

Which of the following audit procedures would be least likely to lead the auditor to find unrecorded fixed asset disposals?

A. Scanning of invoices for fixed asset additions for evidence of a purchase to replace a previously owned fixed asset.
B. Review of property tax files.
C. Examination of insurance policies for evidence of a dropped or cancelled policy.
D. Review of repairs and maintenance expense.

Answer 1

The review of repairs and maintenance expense is least likely to aid in finding unrecorded fixed asset disposals, as it's more focused on expense categorization rather than asset tracking.

Step-by-step explanation:

The student is asking which audit procedure would be least likely to lead the auditor to find unrecorded fixed asset disposals. The answer is option D. Review of repairs and maintenance expense. This procedure is typically aimed at ensuring that expenses are categorized correctly and not at identifying disposed assets. Instead, auditors would normally expect to find evidence of asset disposals through the scanning of invoices (option A), review of property tax files (option B), and especially through examining insurance policies (option C) for any cancellation or drop in coverage that could indicate disposal of assets.