Study the chart of ending balances for prior year (202x) and current audit year (202y) financial accounts related to long-lived assets. The audit client is in the commercial construction industry and owns a large amount of construction and utility equipment.
Ending Balances202x202yFixed Assets: Equipment$4,655,300.00$4,385,402.00Depreciation Expense$238,500.00$264,390.00Repairs & Maintenance$98,000.00$97,500.00Gain on Sale of Assets$0.00$35,000.00
Based on this information, answer the following questions:
- What type of planning analytical procedures should the audit team include in their audit plan?
- State at least two planning analytical procedures along with any follow-up conversation the auditing team should have with the audit client’s management.