How Would You Verify Freehold Property Or Building, Leasehold Property Or Building And Preliminary Expenses?

Where buildings are freehold the title deeds and see that the building is in the name of the client. Vouch carefully any addition made during the year. If any building is sold during the year, vouch such sales and see that profit or less on sales is correctly dealt with. See that property is adequately depreciated. Note that the amount debited to building account is a part of capital charge and that nothing on account of revenue.

Lease deed should be examined to find out its value and during. The lease money paid should be capitalized. Lease rent should be debited to the revenue account. The lease money should be spread over the number of years of the lease and debited to revenue account. In case of a lease of building, depreciation, insurance against fire, necessary repairs etc should be debited to revenue account. He should also examine the last receipt for the payment of the lease rent.

An auditors should be refer to the contract with the vendors to see whether they have been agreed to bear the whole or any part of these and if so, he must see that the company is not made to bear the expense that ought rightly to be charged vendors. Items debited to preliminary expenses account must be carefully vouched to see that they are properly chargeable to this account.

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