While auditing an urban bus company in a city of 50,000 population, you encounter the following situation:

1 You have checked an authorization for the purchase of five engines to replace the engines in five buses.

2 The cost of the old engines was removed from property and that of the new engines properly capitalized. The work was done in the company garage.

3. You find no credits for salvage or for the sale of any scrap metal at any time during the year. You have been in the garage and did not see the old engines.

4. The accountant, who is also treasurer and office manager, is an authorized check signer and has access to all cash receipts. Upon inquiry the accountant does not recall the sale of the old engines or of any scrap metal. 

Assuming that the engines were sold as scrap, outline all steps which this fact would cause you to take in connection with your audit. Give consideration to steps beyond those related directly to this one item.