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At page 266 BPP Audit and Assurance Workbook, there is a test on completeness of financial statement assertion about non- current assets:
Compare non-current assets in the general ledger with the non-current assets register and obtain explanations for differences.
I want to ask about the direction of this test: As the objective of test on completeness of financial statement assertion about non- current assets is that all additions and disposals that occured in the year should have been recorded. Moreover, I think that and any addition to non-current assets must be firstly recorded in the non-current assets register, so i think the audit procedure should be: Compare non-current assets register with the non-current assets in the general ledger and obtain explanations for differences.
So what do you think about that? Am I correct?Whether or not assets are recorded first in the ledge a/cs or the asset register is irrelevant – the total costs/accumulated depreciation on both should, at the end of the day agree.
For completeness or recording inventory/PPE the direction of testing is “physical to book” – meaning to what is recorded in the accounting records through to -> ledger accounts -> TB -> FS
The existence assertion is the “reverse”.
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