A few years ago there was a forestry company in Canada called Sino Forest. While the company was listed in the TSE, many of the forestry assets the company reported were not located in Canada. Fraud was discovered due to "missing forests." The founder of the company was accused of “gross breach of trust” for misleading investors. A board committee looking into the company’s disclosures has been unable to find the trees or even whether the so-called missing trees existed. The auditor was also sued for negligence for failing to conduct the audit with due care, primarily relating to the audit of the forest in other countries.

Did the auditors meet the requirement of sufficient and appropriate evidence? The story mentions that without being able to prove the existence of the standing timber, you also can’t prove valuation or ownership. What procedures would an auditor of a timber company do to gather evidence on these three audit assertions?