Similar considerations govern the audit of motor vehicles as to those relating to plant and machinery. The only issue of consideration here is existence and ownership. Motor vehicles being mobile may not be available for the auditor to physically verify when he pays his visit. Related evidence can suffice however to prove existence for example if we own the motor vehicle we expect that if it is being used it will incur costs such as insurance, repairs and maintenance, and fuel. The engine and chassis numbers should be checked against the log book to ensure that it is the same vehicle that we are looking at as clients have been known to change the registration number plates from one vehicle to another.

Beneficial ownership

Ensure that the log book is in your client's name.

Furniture, fixtures and fittings

The only issue here to note is the depreciation of fixtures and fittings. Because of their nature, this is usually done on replacement basis rather than calculated and charged on an annual basis. In other words the initial cost is capitalised and any subsequent replacement are charged to the profit and loss account as they are incurred. Furniture is depreciated just like plant and machinery.