How would you verify the preliminary expenses
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In order to verify preliminary expenses we should check that:
1. Only the expenses related to creation, floatation or incorporation are included in this item.
2. These expenses are not debited to the Profit and Loss Account of the first year. They should be spread over a period of three, five or seven years.
3. There are receipts, invoices or bills to prove the payment of these expenses.
4. If a Prospectus has been issued, one should check that the amount of preliminary expenses does not exceed the amount stated in the Prospectus.
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