Auditing PPE

​AUDITING PROPERTY, PLANT AND EQUIPMENT

by Mr. Lowelle C. Pacot, CPA, MMA

LEARNING OBJECTIVES

At the end of the lesson, you can

• Align the appropriate substantive audit procedures for property, plant, and equipment and related accounts to its respective assertions and audit objectives.

• Prepare the audit working papers such as the lead schedules, analysis of account balances and transactions for property, plant and equipment and related accounts.

• Propose necessary adjusting entries to bring the account balances for property, plant and equipment and related accounts to its should-be balance.

• Compute the adjusted account balances for property, plant and equipment to be shown in the financial statements.

​AUDITING PROPERTY, PLANT AND EQUIPMENT

by Mr. Lowelle C. Pacot, CPA, MMA

REVIEW OF LESSON FROM PREVIOUS COURSES

Review Question no. 1:

Define PPE. Highlight its characteristics.

​AUDITING PROPERTY, PLANT AND EQUIPMENT

by Mr. Lowelle C. Pacot, CPA, MMA

REVIEW OF LESSON FROM PREVIOUS COURSES

Review Question no. 1:

Define PPE. Highlight its characteristics.

Answer:

PPE are tangible assets that are held for use in production or supply of goods or services, for rental to others, or for administrative purposes, and are expected to be used during more than one period.

​AUDITING PROPERTY, PLANT AND EQUIPMENT

by Mr. Lowelle C. Pacot, CPA, MMA

REVIEW OF LESSON FROM PREVIOUS COURSES

Review Question no. 2: Discuss the measurement of PPE.

​AUDITING PROPERTY, PLANT AND EQUIPMENT

by Mr. Lowelle C. Pacot, CPA, MMA

REVIEW OF LESSON FROM PREVIOUS COURSES

Review Question no. 2: Discuss the measurement of PPE.

Answer:

Initial Measurement = At cost

Subsequent Measurement = Either cost model or the revaluation model

​AUDITING PROPERTY, PLANT AND EQUIPMENT

by Mr. Lowelle C. Pacot, CPA, MMA

REVIEW OF LESSON FROM PREVIOUS COURSES

Review Question no. 3: Narrate the system processes for PPE.

​AUDITING PROPERTY, PLANT AND EQUIPMENT

by Mr. Lowelle C. Pacot, CPA, MMA

REVIEW OF LESSON FROM PREVIOUS COURSES

Review Question no. 3: Narrate the system processes for PPE.

Answer:

​AUDITING PROPERTY, PLANT AND EQUIPMENT

by Mr. Lowelle C. Pacot, CPA, MMA

TRIVIA

In 2018, LSU's PPE was reported at PHP215 million and its total assets at PHP315 million.