Suwi and Sons has a number of properties and the company re-values their property including land on a rolling basis every 5 years using an independent valuer - Sydney Surveyors. Zaidah and Mwape Associates is currently preparing the audit programmes for the year-end audit of Suwi and Sons.

During the audit, the team has identified an error in the valuation of work in progress, as a number of the assumptions contain out of date information. The directors of Suwi and Sons have indicated that they do not wish to amend the financial statements.

Required:

1. Explain the steps Zaidah & Mwape Associates should now take and the impact on the auditor’s report in relation to the directors’ refusal to amend the financial statements. (5 marks)
2. Describe the substantive procedures the auditor should perform to obtain sufficient and appropriate audit evidence in relation to:

1. The revaluation of land and buildings and other properties (6 marks)
2. Explain the importance of work of others in an audit (6 marks)
3. What is a management letter or Letter of internal controls (3 marks)

Answer rating: 100% (QA)

Auditor responsibility when director refuse to amand the financial statements Auditor is primary responsibly to obtain reasonable assurance related to fraud error and material misstatement while perfo... View the full answer