Document ID: chunk:federal_register_of_legislation:F2022C01208:reg:14:p41
Version: federal_register_of_legislation:F2022C01208
Segment Type: reg
Provision Reference: reg 14 (pt 41/57)
Character Range: 123105–126350

with those of prior periods and with those anticipated for the current period.  Enquire about major fluctuations and differences.

   8. Compare inventory turnover with that in previous periods.

   9. Enquire about the method used for identifying slow moving and obsolete inventory and whether such inventory has been accounted for at net realisable value.

  10. Enquire whether any inventory has been consigned to the entity and, if so, whether adjustments have been made to exclude such goods from inventory.

  11. Enquire whether any inventory is pledged, stored at other locations or on consignment to others and consider whether such transactions have been accounted for appropriately.

Investments (Including Associated Entities and Financial Instruments)

  36.   Obtain a schedule of the investments at the balance sheet reporting date and determine whether it agrees with the trial balance.

  37.   Enquire whether the accounting policy applied to investments is consistent with prior periods.

  38.   Enquire from management about the carrying values of investments.  Consider whether there are any realisation problems.

  39.   Enquire whether there are any new investments, including business combinations.  Consider classification, measurement and disclosure in respect of material or significant acquisitions.

  40.   Consider whether gains and losses and investment income have been properly accounted for.

  41.   Enquire about the classification of long‑term and short‑term investments.

Property Plant and Equipment and Depreciation

  42.   Obtain a schedule of the property, plant and equipment indicating the cost and accumulated depreciation and determine whether it agrees with the trial balance.

  43.   Enquire about the accounting policy applied regarding residual values, provisions to allocate the cost of property, plant and equipment over their estimated useful lives using the expected pattern of consumption of the future economic benefits and distinguishing between capital and maintenance items.  Consider whether there are any indicators of impairment and whether the property, plant and equipment have suffered a material, permanent impairment in value.

  44.   Discuss with management the additions and deletions to property, plant and equipment accounts and accounting for gains and losses on disposals or de‑recognition.  Enquire whether all such transactions have been properly accounted for.

  45.   Enquire about the consistency with which the depreciation method and rates have been applied and compare depreciation provisions with prior years.

  46.   Enquire whether there are any restrictions on the property, plant and equipment.

  47.   Enquire whether lease agreements have been properly reflected in the financial report in conformity with current accounting pronouncements.

Prepaid Expenses, Intangibles and Other Assets

  48.   Obtain schedules identifying the nature of these accounts and determine whether they agree with the trial balance.  Discuss recoverability thereof with management.

  49.   Enquire whether management have updated their impairment calculations in respect of goodwill or other intangibles.  Consider whether there have been any indicators of impairment