The auditor should examine the title deeds and in case of any doubts as to the validity of the title, he may refer the matters to the company's solicitors. If the property has been mortgaged, the title deeds will be in possession of the mortgaged or his solicitor and a certificate should in that case be obtained from the parties to that effect. As regard valuation, the land may be valued at cost price but it will become necessary to provide for some reasonable depreciation in regard to the building. The original cost of this asset can be verified from the deed of conveyance or with reference to the builder's receipts etc. if the building was made by the company itself.
In regard to the original purchase of plant, the same would be verified with the invoices received from the manufactures. Erection charges would be allowed to be capitalized. In case of an old concern, that auditor will require from chief engineers a certified list of the plant and machinery at the date of the balance sheet. In case of any additions during the period under audit, he must satisfy himself to see that these represent some new plant or machinery acquired and not renewals or replacement wrongly capitalized.
In regard to the original purchase of plant, the same would be verified with the invoices received from the manufactures. Erection charges would be allowed to be capitalized. In case of an old concern, that auditor will require from chief engineers a certified list of the plant and machinery at the date of the balance sheet. In case of any additions during the period under audit, he must satisfy himself to see that these represent some new plant or machinery acquired and not renewals or replacement wrongly capitalized.
