The company currently owns water rights in several regions in multiple countries which grant rights to a
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- The company currently owns water rights in several regions in multiple countries which grant rights to a fixed number of units of water per share and were purchased to support vineyard activities. They have right to use over an indefinite period and rights are considered to have an indefinite useful life (so therefore are tested annually for impairment at the cash generating unit level). The assessment of indefinite life is reviewed annually to determine whether this continues to be supported, or a change to finite life should be made on a prospective basis.
- While overall controls relating to fixed asset subsystems are generally strong:
- The company's management is not transparent about how they assess the value of these intangible assets. The accounts states that recoverable amount of the cash-generating unit's assets are higher than the asset's carrying value and therefore no impairment is required to be recognised.
Complete the table below with the following tasks in mind
Key Assertion | Audit Objective | Substantive audit procedures |
Existence | ||
Rights and Obligations | ||
Completeness | ||
Valuation, Accuracy and allocation | ||
Classification | ||
Presentation |
a. Describe how each of the key assertions are at risk under audit objective
b. Design relevant substantive test of details to address the assertion at risk identified.
Related Book For
Smith and Roberson Business Law
ISBN: 978-0538473637
15th Edition
Authors: Richard A. Mann, Barry S. Roberts
Posted Date: