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Hi Sir
If there is deficiency that physical verification of assets within NCA register has not been performed for some time. A current programme has started but is only 15% complete due to staff shortages
For its control I have suggested that Additional resources should be devoted for completing the physical verification of all assets within the register. If any assets cannot be located, they should be written off.
What test of control can we suggest for the control which I have suggested?
The Q does not as for test of control. But supposing it did, what test of control can YOU suggest? What is it that the auditor can do to test whether the physical verification of all assets has been completed? If the test is satisfactory the auditor would be able to place reliance on the programme having been completed and so reduce his substantive tests on the existence of assets at the end of the year.
Would it be fine to say that Observe the process to ensure physical verification of assets within NCA register has been performed?
Observing a stock count that takes a day is one thing – but to observe this process, which could take weeks is unsuitable.
Then what test of control can we write for the control which I have suggested?
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