Your audit practice has recently been appointed as auditor to W Limited (W), a manufacturing company. As

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Question:

Your audit practice has recently been appointed as auditor to W Limited (W), a manufacturing company. As the audit senior, you have just received the draft accounts from W’s accountant which show the following Property Plant and Equipment (PPE) for the year ended March 31, 2016:

Land Plant and Motor Total

and Buildings Machinery Vehicles

$000 $000 $000 $000

Cost

Beginning 1,200. 650 380 2,230. (one amount for each file)

Additions 120 244 147 511

Disposals - (130). (157) (287). (one amount for each file)

Ending 1,320 764 370 2,454

Accumulated

Depreciation

Beginning 650 353 271 1,274

Depreciation 49 82 85 216

Disposal - (95) (142) (237). (one amount for each file)

Ending 699 340 214 1,253

REQUIRED:

(a) Prepare, at the request of your engagement manager, a memorandum for the assistant assigned to the audit, setting out the audit program for the audit of PPE in W.

(b) Discuss three ways to verify the existence of PPE.