Audit Risk

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February 6, 2016 at 1:13 pm #299483
anu1234
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The directors reviewed the useful lives and depreciation rates of all classes of plant and machinery.
This resulted in an overall increase in the asset lives and a reduction in the depreciation charge for the year

Is there any audit risk with regards to this situation ?
February 6, 2016 at 4:29 pm #299516
Ken Garrett
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Yes. The directors might have deliberately reduced the depreciation rates to manipulate profits upwards so that profits become materially overstated.
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