ABC Limited is a national fertiliser manufacturer with factories in every State of Australia. The company owns freehold property, plant and office equipment in each State, and maintains a large fleet of motor vehicles for sales staff and executives. Until last year, the company had maintained a fixed asset register using spreadsheet software. However, because of the substantial time and cost involved in maintaining the register, the company's IT staff have devised a fully computerised fixed asset system. You are aware that there have been a few problems in implementing the system, and you have decided to use generalized software to audit the file. The fixed asset master file of ABC Limited contains the following fields:

Item identification number

Date acquired (dd/mm/yyyy)

Description

Location

Transaction code (A = new acquisition; W = write down; I = improvements)

Asset class

Cost ($)

Revalued amount (if applicable) ($)

Depreciation method (prime cost, diminishing value)

Depreciation rate-book (%)

Depreciation rate-tax (%)

Expected life of asset (years)

Residual value ($)

Accumulated depreciation (opening balance)-book ($)

Accumulated depreciation (opening balance)-tax ($)

Current year depreciation-book ($)

Current year depreciation-tax ($)

Sales proceeds ($)

Sale date (dd/mm/yyyy)

REQUIRED

a. Suggest four ways in which generalised audit software could be used to assist in the audit of property, plant and equipment for ABC Limited. For each of the four items, explain how the relevant balance related audit objective would be satisfied.

b. Explain how test data could be used in the audit of fixed assets for ABC Limited.