1. If the auditor has detected misstatements in prior audits, the assessment of inherent risk for the property management process will usually be set higher.
2. The property, plant, and equipment records function should be segregated from the custodial function.
3. Substantive analytical procedures should not be used in the audit of property, plant, and equipment.
4. Reviewing capital budgets and comparing the amounts spent with amounts budgeted is an example of a substantive analytical procedure for auditing prepaid accounts.
5. Inquiry of entity personnel and a review of lease transactions for the same period can provide evidence on proper cutoff for capital leases.