Property, plant and equipment can range from a low risk to a high risk audit area, depending on the nature of transaction and events engaged in by the reporting entity. Construction, capitalized interest, and complex leasing arrangements tend to result in higher risk of material misstatement. This module addresses tips and techniques for auditing tangible long-lived assets for various assessed risk levels, with a special emphasis on lease accounting under Topic 842.

Major Topics:

  • Typical audit risks and responses for tangible long-lived assets
  • Special issues related to initial recognition and capitalization, including capitalized interest
  • Key controls related to PP&E
  • Lease accounting requirements and practical application of Topic 842
Learning Objectives
  • Discover and discuss typical audit risks and special audit considerations for tangible long-lived assets.
  • Recognize and tailor a detailed audit plan to respond to assessed risk of material misstatement related to fixed assets and leases.
  • Explore and explain key controls related to property, plant, and equipment.
  • Discover and describe and apply lease accounting requirements, including the impact of Topic 842 lease accounting standard changes on both lessees and lessors.
Last updated/reviewed: June 10, 2024

Included In Certifications

This course is included in the following Certification Programs:

13 CoursesAudit Training Certification - Level 1 - Beginning Staff

  1. Professional Skepticism - Creating a Mindset for Finding Fraud and Error
  2. Audit Documentation - Creating Workpapers That Pass Review
  3. Adapting to the Engagement - Differentiating the Requirements of Preparations, Compilations, Reviews, and Audits
  4. The Audit Risk Model - Understanding Foundational Principles
  5. Internal Control Fundamentals - Satisfying Audit Requirements for Evaluating Design and Implementation
  6. Auditing Cash - Applying Basic Skills to the Starting Point of Any Audit
  7. Auditing PP&E, Including Leases under Topic 842 - Digesting the Risks of Improper Treatment of Tangible Long-Lived Assets
  8. Auditing Inventory - Performing Required Observations and Other Common Procedures
  9. Analytical Procedures - Comprehending Financial Statement Audit Fundamentals
  10. Audit Reporting Fundamentals - Introducing Core Concepts in the Audited Financial Statement Drafting and Issuance Process
  11. AICPAs Code of Professional Conduct - Exploring the Foundational Principles Underlying the CPA Profession as a Whole
  12. Accounting Update - Hot Topics for Preparing Current Period Financial Statements
  13. Auditing & Attest Update - Hot Topics for Current Period Audits and Other Attest Services
7 Reviews (15 ratings)

Reviews

5
Anonymous Author
The topic of leases is complex and hard to understand - this course breaks it down and definitely offers more clarity for new auditors.
4
Anonymous Author
Salvage value: Value at the end of an asset’s useful life that may be realized through sale or trade-in.
5
Anonymous Author
The course illustrate the audit procedure needed in auditing PP&E and Leases.
5
Anonymous Author
Great overview of the risks and procedures related to the audit of PP&E
5
Anonymous Author
I think that all auditors would benefit from taking this course.
5
Member's Profile
This was a good way to jog my memory of PP&E in auditing.
3
Anonymous Author
Good overview on auditing plans property equipment
Prerequisites
Course Complexity: Foundational

No Advanced Preparation or Prerequisites are needed for this course.
Designed For: Accountants responsible for auditing property, plant and equipment, including leases.

Education Provider Information
Company: Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact: For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Instructor for this course
  Course Overview CPE
Course Syllabus
INTRODUCTION AND OVERVIEW
  Learning Objectives and Introduction to Auditing PP AND E Including Leases Under Topic 8423:36
  Typical Audit Procedures12:08
  Capitalizing Cost and Related Depreciation Considerations7:52
  Capitalized Interest and Special Considerations12:56
  Key Controls4:42
LEASE ACCOUNTING
  Overview of Lease Accounting per Topic 8424:06
  Identifying a Lease Under Topic 8424:38
  Criteria for Lease Classification and Resulting Accounting Under Topic 84211:38
  More on the Details of Lease Classification20:06
  Lessee Accounting8:56
  Lease Modifications4:06
  Lessor Accounting6:30
Continuous Play
  Auditing PP&E Including Leases Under Topic 8421:41:14
Supporting Materials
  Slides: Auditing PP&E, Including Leases under Topic 842PDF
  Auditing PP&E, Including Leases under Topic 842 Glossary/IndexPDF
Review And Test
  REVIEW QUESTIONSquiz
 FINAL EXAMexam