In the Balance Sheet of Watches Ltd., additions worth 20 Crores are appearing under Property, Plant & Equipment. Auditor of the company, in…

Relevant assertion for verification of ownership of PPE in the given situation is Rights and Obligation. Procedure to verify the ownership rights over PPE is as under: i. The auditor while performing testing of additions should also verify that all PPE purchase invoices are in the name of the entity that entitles legal title of ownership to the respective entity. ii. For all additions to land and building in particular, the auditor should check the conveyance deed/ sale deed to verify whether the entity is the legal and valid owner or not. iii. The auditor should insist and verify the original title deeds for all immoveable properties held as at the balance sheet date. iv. In case the entity has given such immoveable property as security for any borrowings and the original title deeds are not available with the entity, the auditor should request the entity's management for obtaining a confirmation from the respective lenders that they are holding the original title deeds of immoveable property as security. v. In addition, the auditor should also verify the register of charges, available with the entity to assess that any charge has been created against the PPE.