ACCA Audit and Assurance (F8) Practice Exam

What should be maintained for Tangible Non-Current Assets according to audit considerations?

1. An inventory of shares held

2. A register of maintained assets

3. An annual revenue report

4. A list of potential buyers

The correct answer is: A register of maintained assets

Maintaining a register of tangible non-current assets is essential for audit considerations as it provides a detailed account of all significant assets owned by the entity. This register helps in tracking assets from their acquisition through to their disposal and ensures that the organization has an accurate record of its asset base, which is crucial for both financial reporting and audit purposes. The register serves multiple functions: it aids in verifying the existence, ownership, and condition of the assets during an audit, supports the valuation processes for financial statements, and helps ensure compliance with accounting standards. Maintaining an accurate register allows for effective asset management and facilitates the identification of depreciation and impairment, which are necessary for accurate financial reporting. Additionally, an asset register will include key details such as purchase date, cost, location, and any supporting documentation regarding maintenance or improvements made over time. This comprehensive documentation is invaluable in substantiating the asset values reflected on the balance sheet. Without such a register, auditors may find it challenging to ascertain the accuracy and completeness of the entity's non-current assets, potentially leading to issues of misstatement in financial reports.