i. Motor vehicle of an employee covered through insurance scheme of the company's
motor vehicles
- Auditor should physically verify the company's vehicles to ascertain existence and
this will limit inclusion of employees' personal cars.
- Check if the employee has such motor vehicle benefits.
- n Obtain a schedule from the insurance firm confirming the vehicles in the scheme
and their owners. Check the receipts obtained after payment of premium and confirm
whether they are in agreement with the amount due.
- n Checks the strength of the controls placed on the insurance scheme and verify
approval of all insurance contracts. Confirm with the insurance company over the
premiums paid and details of the vehicles covered.
- Evaluate the internal controls placed over payments made to insurance firms and
ensure they are right an accurate.
ii. Motor vehicle repaired using company's funds. And the amount appears as an
expense in the accounting records
- Obtain confirmations from the garages on the vehicles repaired.
- The auditor should ensure that payments made for the repair is approved by senior
management.
- Ensure that the amount paid is reasonable and not exorbitant.
- The auditor should obtain managements representation on this amount if cannot be
verified by existing documents.
- Check the amounts paid for the repair and compare with the past periods for
consistency.
- The auditor should ensure the amount is correctly classified in the financial statements
supported with proper documents.
- Check the B.O.Ds minutes if the employees have such motor vehicle benefits.
- Visit the garage and examine the repair records to confirm the vehicles which were repaired.
Kavungya answered the question on May 14, 2019 at 13:21
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