Andrea Green a junior audit or Hanes and Associated Chartered Accountant was assigned to conduct an...

 

Transcribed Image Text:

Andrea Green a junior audit or Hanes and Associated Chartered Accountant was assigned to conduct an audit of fixed assets at Compton Limited for the year ended December 31, 2021. She was then presented a fixed assets' schedule and asked to develop and audit program to facilitate an audit for fixed assets for the year under consideration. Fixed assets comprise 75% of the entity's total assets on its statement of financial position. However, to date, total fixed assets were kept off the books and tracked in a schedule by the company's financial controller. Consequently, the auditors are proposing that these be brought to books and recognized immediately for the currently financial reporting period. Below is the fixed assets' schedule presented to her as indicated above: Accum Dep'n Accum Dep'n CostRevaluion Addition Reval CostRevaluation as at Janl, Charge for asat Dec 31. NBV as at Dec as at Jan 1, 2021 ution as at Dec, 2021 2021 40.00,000 10,000 50,000 50,000,00.00 Assets the peried 2021 31, 2021 Land SO,00,000.00 50,00,000 50,00 250,000 5250,00.0 4,75,000 Buiding Mokor Vehickes 9,00,00 1,000 10,00.00 2500,00 S00 3,00 7,0.00 99,00,000 1,0 110,000 750000 750,0000 8.250,000 101,750,00 00 Required: a. Briefly discuss the four questions posited when obtaining persuasive audit evidence | 8 marks | b. Develop the relevant audit procedures to obtain sufficient and appropriate audit evidence based on the schedule obtained above from management. |14 marks c. Should management disagree with the auditor's proposal regarding fixed assets, indicate the most appropriate audit report that should be presented by the auditors and why. [3 marks | d. Should the auditor decides to perform physical inspection of motor vehicles, what assertions would be deemed relevant to this procedure? 12 marks | Andrea Green a junior audit or Hanes and Associated Chartered Accountant was assigned to conduct an audit of fixed assets at Compton Limited for the year ended December 31, 2021. She was then presented a fixed assets' schedule and asked to develop and audit program to facilitate an audit for fixed assets for the year under consideration. Fixed assets comprise 75% of the entity's total assets on its statement of financial position. However, to date, total fixed assets were kept off the books and tracked in a schedule by the company's financial controller. Consequently, the auditors are proposing that these be brought to books and recognized immediately for the currently financial reporting period. Below is the fixed assets' schedule presented to her as indicated above: Accum Dep'n Accum Dep'n CostRevaluion Addition Reval CostRevaluation as at Janl, Charge for asat Dec 31. NBV as at Dec as at Jan 1, 2021 ution as at Dec, 2021 2021 40.00,000 10,000 50,000 50,000,00.00 Assets the peried 2021 31, 2021 Land SO,00,000.00 50,00,000 50,00 250,000 5250,00.0 4,75,000 Buiding Mokor Vehickes 9,00,00 1,000 10,00.00 2500,00 S00 3,00 7,0.00 99,00,000 1,0 110,000 750000 750,0000 8.250,000 101,750,00 00 Required: a. Briefly discuss the four questions posited when obtaining persuasive audit evidence | 8 marks | b. Develop the relevant audit procedures to obtain sufficient and appropriate audit evidence based on the schedule obtained above from management. |14 marks c. Should management disagree with the auditor's proposal regarding fixed assets, indicate the most appropriate audit report that should be presented by the auditors and why. [3 marks | d. Should the auditor decides to perform physical inspection of motor vehicles, what assertions would be deemed relevant to this procedure? 12 marks |

Answer rating: 100% (QA)

a The four questions that need to be answered when obtaining persuasive audit evidence are 1 What is ... View the full answer