You are the engagement partner of the entity Fish Farms. The company operates salmon farms in...

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You are the engagement partner of the entity Fish Farms. The company operates salmon farms in Canada and Chile, mainly supplying the American and Asian markets with fresh and frozen salmon. You have the following information of the stock of salmon (biomass). 1 Lists with details of numbers and weights of live salmon in net cages in open water and smolt (small salmon) in closed fresh-water tanks on land. 2 Daily market prices for harvested salmon of various sizes. 3 Production cost of salmon of all sizes. Seventy per cent of the production costs of salmon relates to feeding. It takes two to five years for smolt to grow into market-ready salmon. Fish Farms has designed and implemented strong controls that keep track of the number and weight of salmon during production and at harvesting. Smolt are counted when they transfer from fresh water to cages in the sea. All harvested fish are counted and weighed. Dead fish are immediately removed from cages and counted. The weight of the fish during production is an estimate based on the relationship between expected growth rates and feed consumption. The net cages are large and the salmon are constantly in motion. Salmon are easily stressed and cannot be removed from the cages before they are harvested. Required: a What are the assertions you consider to be most critical in the audit of the stock of salmon (biomass) of Fish Farms? b You plan to rely on the internal controls when appropriate. To prepare for a meeting with your audit team, write a short memo explaining why you are considering using a reliance strategy. c Give examples of tests of controls you plan to perform in the audit of the stock of salmon (biomass). 97% You are the engagement partner of the entity Fish Farms. The company operates salmon farms in Canada and Chile, mainly supplying the American and Asian markets with fresh and frozen salmon. You have the following information of the stock of salmon (biomass). 1 Lists with details of numbers and weights of live salmon in net cages in open water and smolt (small salmon) in closed fresh-water tanks on land. 2 Daily market prices for harvested salmon of various sizes. 3 Production cost of salmon of all sizes. Seventy per cent of the production costs of salmon relates to feeding. It takes two to five years for smolt to grow into market-ready salmon. Fish Farms has designed and implemented strong controls that keep track of the number and weight of salmon during production and at harvesting. Smolt are counted when they transfer from fresh water to cages in the sea. All harvested fish are counted and weighed. Dead fish are immediately removed from cages and counted. The weight of the fish during production is an estimate based on the relationship between expected growth rates and feed consumption. The net cages are large and the salmon are constantly in motion. Salmon are easily stressed and cannot be removed from the cages before they are harvested. Required: a What are the assertions you consider to be most critical in the audit of the stock of salmon (biomass) of Fish Farms? b You plan to rely on the internal controls when appropriate. To prepare for a meeting with your audit team, write a short memo explaining why you are considering using a reliance strategy. c Give examples of tests of controls you plan to perform in the audit of the stock of salmon (biomass). 97%

Answer rating: 100% (QA)

a The assertions that are considered most critical in the audit of the stock of salmon biomass at Fish Farms are Existence Ensuring that the recorded quantities of live salmon in net cages and smolt i... View the full answer