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IC T MOORE STEPHENS I^p V L J L LOVELACE CPAs& ADVISORS - ISubstantive Testing(cont.) ICapital Assets and Capital Expenditures • Determine that property and equipment • Confirm that the capitalized costs and related represent a complete and valid listing of the depreciation associated with all sold, I capitalizable cost of assets purchased, abandoned, damaged,or obsolete fixed assets constructed, or leased, and that they are have been removed from the accounts. physically on hand. • Make certain that depreciation charges on all I • Ascertain that capital expenditures represent a depreciable assets have been computed on an complete and valid listing of the capitalizable acceptable and consistent basis and that the cost of the property and equipment acquired related allowance accounts are reasonable. I during the period, and that capitalizable costs • Ascertain that capital expenditures and fixed are excluded from repairs and maintenance and assets are properly classified and related similar expenditure accounts. disclosures are adequate. I Accounts Payable and Other Liabilities I • Determine that recorded expenses and cash • disbursements are for goods and services • Confirm that expenses and related disburse- ments and liabilities have been correctly authorized and received. recorded as to account, budget category, period, II • Ascertain that expenses incurred for goods and and amount. services and related accounts payable have all • Ascertain that expenses and related liabilities are been identified, including any contingent or properly classified by budget category and contractual liabilities. related disclosures are adequate. I • Make certain that expenses for goods and services are authorized in accordance with the Ibudget and other regulations or requirements. Payroll and Related Liabilities • Ascertain that payroll disbursements are made • Ascertain that payroll and related liabilities are Ionly for work authorized and performed by correctly recorded as to amount and period and authorized personnel. properly distributed by account and budget • Determine that payroll is computed using rates category and disclosures are adequate. I and other factors in accordance with contracts • the status of employee compensatory and relevant laws and regulations. benefits for accruals and disclosure. I Long-Term Debt and Debt Service Expenditures • Ascertain that debt is authorized and properly • Ascertain that debt service expenditures recorded. (principal and interest payable)are properly I • Ascertain that all indebtedness of the City is recorded,classified,and disclosed. dentified, recorded, and disclosed. • Ascertain that debt and related restrictions, • Ascertain that the City has complied with guarantees, and commitments are properly I provisions of indentures and agreements related presented and related disclosures are adequate. to debt, including provisions on use of proceeds. • Review arbitrage calculations for reasonableness. I o 27