SUBJECT: Governance, Business Ethics, Risk Management and Internal Control Direction: Explain the following statements/question in not less than 5 sentences. For each of the following misstatements in property, plants and equipment accounts, state an internal control that the client could install to prevent the misstatement from occurring. 1. The asset lives used to depreciate equipment are less than reasonable, expected useful lives. 2. Capitalizable assets are routinely expensed as repairs and maintenance, perishable tools, or supplies expense. 3. Construction equipment that is abandoned or traded for replacement equipment is not removed from the accounting records. 4. Depreciation expense for manufacturing operations is charged to administrative expenses.
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SUBJECT: Governance, Business Ethics, Risk Management and Internal Control
Direction: Explain the following statements/question in not less than 5 sentences. For each of the following misstatements in property, plants and equipment accounts, state an internal control that the client could install to prevent the misstatement from occurring. 1. The asset lives used to depreciate equipment are less than reasonable, expected useful lives. 2. Capitalizable assets are routinely expensed as repairs and maintenance, perishable tools, or supplies expense. 3. Construction equipment that is abandoned or traded for replacement equipment is not removed from the accounting records. 4. Depreciation expense for manufacturing operations is charged to administrative expenses.
