Auditing and EthicsQuestion 5665 of 212
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14. In case any intangible asset is not in active use by the entity, the auditor should check whether: -

Options

AThe deletion with respect to the intangible asset has been recorded in the books of accounts post-approval by the entity's management.
BThe amortization charge has ceased beyond the date of deletion.
CThe deletion with respect to the intangible asset has been recorded in the books of accounts post-approval by the entity's management and the amortization charge shall be continued.
DThe deletion with respect to the intangible asset has been recorded in the books of accounts post-approval by the entity's management and the amortisation charge has ceased beyond the date of deletion. (2 Marks)
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Correct Answer

✅ Option D — The deletion with respect to the intangible asset has been recorded in the books of accounts post-approval by the entity's management and the amortisation charge has ceased beyond the date of deletion. (2 Marks)

All Options:

  • AThe deletion with respect to the intangible asset has been recorded in the books of accounts post-approval by the entity's management.
  • BThe amortization charge has ceased beyond the date of deletion.
  • CThe deletion with respect to the intangible asset has been recorded in the books of accounts post-approval by the entity's management and the amortization charge shall be continued.
  • DThe deletion with respect to the intangible asset has been recorded in the books of accounts post-approval by the entity's management and the amortisation charge has ceased beyond the date of deletion. (2 Marks) ✓

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Detailed Solution & Explanation

Correct Answer: Option **D**

Explanation:
If an intangible asset is retired from active use and is no longer expected to generate future economic benefits, it should be derecognized (deleted) from the books. The auditor's responsibility in such cases is to verify that:
1. The deletion with respect to the retired intangible asset has been properly recorded in the books of accounts, post-approval by the entity's management.
2. The amortization charge on the asset has ceased beyond the date of deletion/retirement.

Option D correctly and comprehensively describes both of these checking requirements. Therefore, the auditor should verify that the deletion has been recorded in the books of accounts post-approval by the entity's management, and that the amortization charge has ceased beyond the date of deletion.

Hence, **Option D** is the correct answer.

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