Disposal of fixed assets: Enquire from management with respect to disposals, scrapings, insurance claims. Request to audit insurance claim documentation in detail, ensure correct accounting in the G/L (claim received and assets removed). Inspect correspondence with insurers and obtain confirmation from insurers for claims pending. With discontinued operations, enquire about disposals and inspect receipts. Inspect fixed assets register to ensure assets disposed are reflected as zero.
Repairs and Improvements:
Scrutinize the repair expense, account for any unusual items, and follow up. For the samples chosen of material expenses, compare to source documents to determine the exact nature of the expense.