Acca aa s21 Notes

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3. Revaluations
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Where an asset has been revalued, confirm that the requirements of IAS 16 Property, Plant and 
Equipment have been met (e.g. all assets in the same class have been revalued).
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Agree the revaluation amount (e.g. to a valuation report or market data for similar assets).
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Confirm that the gain has been correctly accounted for in other comprehensive income and 
shown separately in a revaluation surplus in the statement of changes in equity.
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Recalculate depreciation expense based on the revalued amount. Remember that an amount 
equivalent to the additional depreciation expense on the revalued amount may be transferred 
from the revaluation surplus to retained earnings (i.e. within equity) in accordance with IAS 16. 
WHEN YOU FINISHED THIS CHAPTER YOU SHOULD ATTEMPT THE 
ONLINE AA MCQ TEST
 
September 2021 to June 2022 exams
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Chapter 23
USING THE WORK OF OTHERS
1. Introduction to internal audit
The internal audit function is an appraisal and monitoring activity established by management and 
directors for the review of internal control as a service to the entity.
Remember that the directors are required under corporate governance codes to review the need for 
internal audit. Normally to achieve an element of independence from the executive directors, you 
would expect internal audit to report to the audit committee, which is responsible for monitoring and 
reviewing the effectiveness of internal audit.
The main function of the internal audit department is to examine, evaluate and report to 
management and directors on the adequacy and effectiveness of internal control processes.