You are auditing Megabuild plc a company which builds large projects mostly overseas. At present it is building a dam in the Philippines, a motorway in South Africa and a holiday village in France.
The audit team has been asked to devise audit procedures for the verification of work in progress balances as part of inventories. From the test below select whether you would include them as valid tests or exclude them as invalid.

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Test a) Read contracts and note estimated completion date and penalty clauses b) Visit each construction site to verify stage of completion of the contract c) Review costing system and allocation of costs to each contract d) Review calculation of profit to be taken on all contracts at least 50% completed e) Review basis of allocation of overhead to contract and check sample of calculations Valid Invalid