Professional Documents
Culture Documents
1. Current liabilities
▪ A system authorization on both as to original transaction resulting in
a liability and as to payment of the liability should be well-defined
and established
▪ Satisfactory system of record keeping with adequate forms and
documentation should be instituted
▪ There should be a plan of organization
Long-term liabilities
▪ Proper authorization
▪ Clearly defined and sound policy for differentiation of capital and
revenue expenditures should be established
▪ Fixed assets controlling account should be conducted and supported
by detailed plant records
▪ Physical inspections of fixed assets
▪ Periodic review of adequacy of insurance
▪ Reasonable depreciation policy and must be consistently applied
3. Internal control over intangible assets
▪ Proper authorization
▪ Adequacy and consistency of accounting policies governing
intangible assets should be reviewed periodically
▪ General ledger account should be supported by adequate detailed
records and should be periodically reconciled
▪ Schedules of intangibles should be prepared periodically and be
reviewed by a responsible official
Test of Controls and Substantive Tests of
Transactions: Investing Cycle