Answer the following questions based on the information for Cloud 9 presented in the appendix to this text, as well as the current and earlier chapters. You should also consider your answers to the case study questions in earlier chapters. You have obtained the following information about property, plant, and equipment for Cloud 9.

Required

a. You are auditing the acquisition of property, plant, and equipment. Explain the audit procedures to audit the following assertions.

1. Occurrence of acquisitions of property, plant, and equipment.

2. Accuracy of acquisitions of property, plant, and equipment.

3. Completeness of acquisitions of property, plant, and equipment.

b. You are auditing the disposals of property, plant, and equipment. Explain the audit procedures to audit the following assertions.

1. Occurrence of disposals of property, plant, and equipment.

2. Accuracy of disposals of property, plant, and equipment.

3. Completeness of disposals of property, plant, and equipment.

c. How does auditing the disposals of property, plant, and equipment provide evidence related to depreciation expense?

d. You select the following sample of acquisitions of property, plant, and equipment. What can you conclude about the acquisitions of property, plant, and equipment from this evidence? Tolerable misstatement for property, plant, and equipment is $1 million.

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Property, Plant, and Equipment Balance Balance Acquisitions Disposals January 31, 2022 January 31, 2023 Property, plant, and equipment $100,065,433 $9,451,131 $1,813,390 $107,703,174 $ 78,951,627 $ 85,015,272 Assets audited by W&S Partners $7,468,810 $1,405,165 Assets audited by other auditors 22,687,902 21,113,806 1,982,321 408,225 $9,451,131 $1,813,390 $100,065,433 $107,703,174 Accumulated Depreciation Ending January 31, 2023 Beginning January 31, 2022 Depreciation Expense Disposals Accumulated depreciation $5,576,162 $37,803,894 $1,153,117 $42,226,939 $ 895,992 Assets audited by W&S Partners $29,180,183 $4,383,307 $32,667,498 Assets audited by other auditors 8,623,711 1,192,855 257,125 9,559,441 $37,803,894 $5,576,162 $1,153,117 $42,226,939 Book Value of Population $2,678,016 2,343,151 2,447,643 $7,468,810 Size of Book Value Size of Sample 4 Audited Value of Sample $3,143,213 1,231,576 Stratum of Sample $2,678,016 1,231,576 Stratum > $750,000 3 2 $250,000 – $750,000 < $250,000 6 27 10 932,534 932,534 $4,842,126 $5,307,323 3.