end is 31 January 2022. You are the audit supervisor of Abby & Co and are currently preparing the audit programmes for the year-end audit of Ah Hua. You have had a meeting with your audit manager and he has notified you of several issues identified during the audit risk assessment process.

Land and buildings

Ah Hua have a policy of revaluing land and buildings, this is undertaken on a rolling basis over a five-year period. During the year Jackdaw requested an external valuer to revalue several properties, including a warehouse purchased in May 2021. Depreciation is charged on a pro rata basis.

Work in progress

Ah Hua undertakes continuous production of cars, 24 hours a day, seven days a week. An inventory count is to be undertaken at the year end and Abby & Co will attend. You are responsible for the audit of work in progress (WIP) and will be part of the team attending the count as well as the final audit. WIP constitutes the partly assembled cars at the year end and this balance is likely to be material. Ah Hua values WIP according to percentage of completion, and standard costs are then applied to these percentages.

Required:

1. Explain the factors Abby & Co should consider when placing reliance on the work of the independent valuer.

2. Describe the substantive procedures the auditor should perform to obtain sufficient and appropriate audit evidence in relation to the revaluation of land and buildings and the recently purchased warehouse.