The National Company for investments was established on 30/6/2018 and you were assigned as an auditor to audit the company’s financial statements for the financial period ended 31/12/2019. During this financial period, the company had a deal of acquisition to have a group of companies with a percentage not less than 90%. Most of these companies you were auditing for several years except three companies are audited by another office, the revenues of those three companies represent 20% of the total group’s revenues, also the assets of those companies represent 15% of the total group’s assets (it was coordinated to check out the working papers). The acquisition deal amounted to LE 150 million while the companies’ net assets LE 100 million, and by examining the acquisition contracts and the studies concerned evaluating the current value of the assets when acquired amounted to LE 120 million, the trademark’s value was estimated as LE 10 million and it is expected to use the trademark for 4 years if you know that the fair value of the net assets of the companies amounted LE 140 million as of 31/12/2016.

Required: In the light of the available information and based on your previous experience in auditing the affiliates, prepare the following:

1. The main components of the audit plan of the combined financial statements of the holding company with determining the important items according to the available information.
2. The audit procedures concerned to each of the goodwill and the trade mark.
3. The most important points that you want to audit and the inquiries that you have when you read the file of the engagement in the colleague’s office auditing the other firms (only 5 important points are enough).

Answer rating: 100% (QA)

aThe main components of the audit plan for the consolidated financial statements of the controlling company are determined by the information available Revenue the amount of goods and services that an ... View the full answer