{"id":252293,"date":"2026-07-13T01:56:27","date_gmt":"2026-07-12T22:56:27","guid":{"rendered":"https:\/\/1kitap1.com\/en\/auditing-alan-millichamp-john-taylor-1\/"},"modified":"2026-07-13T01:56:27","modified_gmt":"2026-07-12T22:56:27","slug":"auditing-alan-millichamp-john-taylor-1","status":"publish","type":"post","link":"https:\/\/1kitap1.com\/en\/auditing-alan-millichamp-john-taylor-1\/","title":{"rendered":"Auditing – Alan Millichamp John Taylor (1)"},"content":{"rendered":"
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Patents Development expenditure Goodwill Investments e.g. Loans Shares in other companies Current Inventories Work in progress Receivables Bank and cash We will look at the audit implications of each category in turn. This is not an accounting book so it does not include detailed explanations of how these categories of assets have to be disclosed in the financial statements. We will refer to them in the text where the elements of disclosure are significant from an audit perspective, for example disclosures relating to intangible assets, but students should be aware of the detailed disclosure requirements contained in CA 2006 and the relevant Financial Reporting Standards.<\/p>\n

When we are looking to audit assets, whether they are current or non-current, we have to bear in mind the requirements of the assertions set out in Chapter 12. In particular, we are concerned with the second section of those assertions \u2013 \u2018Assertions about account balances at the period end\u2019 but, of course, the other assertions, particularly those relating to transactions, also apply. The assertions set out the following matters about which the auditor has to gather sufficient appropriate evidence so as to verify their truth \u2013 or otherwise: Assertions about account balances at the period end Existence \u2022 Assets, liabilities and equity interests (shareholdings) exist.<\/p>\n

Rights and obligations \u2022 The company holds or controls the rights to assets and all liabilities are those of the company. Completeness \u2022 All assets, liabilities and equity interests that should have been recorded. Valuation and allocation \u2022 Assets, liabilities and equity interests (shareholdings) are included in the financial statements at appropriate amounts and any resulting valuation or allocation adjustments are properly recorded.<\/p>\n

One mnemonic often used by students in connection with the audit of Statement of Financial Position items is: \u2022 Cost \u2022 Authorization \u2022 Value \u2022 Existence \u2022 Beneficial Ownership \u2022 Presentation in the accounts. CAVEBOP covers all aspects of the assertions and might be easier to remember. The audit approach to dealing with gathering sufficient reliable evidence is to consider each of these assertions and to obtain such information as is necessary to validate them.<\/p>\n

You will also appreciate that the amount of evidence required will depend partly on the risk of a material misstatement in the accounts (Chapter 11). Older auditing textbooks tended to stress existence, ownership and value only. The addition of presentation reflects the relatively greater importance attached now to the \u2018fair\u2019 as well as the \u2018true\u2019 view given by the financial statements and the importance of the appropriate selection and disclosure of accounting policies. For assets held at the beginning of the year, the acquisition will have been dealt with in a previous year.<\/p>\n

The presentation will, of course, need to be consistent with the presentation adopted in previous years. You will appreciate that this distinction does not arise with current assets. Tangible assets Tangible assets are so called because you can see them and touch them.<\/p>\n

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Important Notice: Media content referenced within the product description or the product text may not be available in the eBook version. 1kitap1.com\/en Auditing, 13th Edition Alan Millichamp & John Taylor Publisher: Annabel Ainscow List Manager: Birgit Gruber Marketing Manager: Louise Corless Manager, Global Content Project Management: Jyotsna Ojha Content Project Manager: Astha Jaiswal Manufacturing Buyer: Eyvett Davis Typesetter: Straive Text Design: Straive Cover Designer: Simon Levy Cover Image(s): (c) MeganBrady\/Shutterstock.com \u00a9 2026, Cengage Learning EMEA WCN: 02-300-527 ALL RIGHTS RESERVED.<\/p>\n

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