1: Question 4 (4 points) Fixed Assets and Risk of Misstatement Xuan Inc. e 2: You are an auditor and you have recently examined the Fixed Asset continuing schedule of Xuan Inc. The company reports under the IFRS framework. You have made the following notes to yourself based on your investigation: 1. All fixed assets listed on the continuity schedule are in regular, productive use in ze 3: Xuan 2. All additions to fixed assets and disposals of fixed assets were properly recorded on the continuity schedule. age 4 4 3. Payments made for work performed on all fixed assets for the purpose of keeping the assets operating at their intended use and life were recorded in the "Repairs and Maintenance" accounts. 4. Payments made for work performed on all fixed assets for the purpose of extending the life or expanding the capacity of the assets were recorded in the "Repairs and Maintenance accounts. Sunon nurchase of all fixedescate the installation and frict costs that read acer DI # & $ 4 3 % 5 6 8 9 O e r t u O d f g h k V b n alt ctrl LEL2:17:19 Ashish Sharma: Attempt 1 5. Upon purchase of all fixed assets, the installation and freight costs that were used to bring the asset to its state of intended use were capitalized as part of the cost of the asset. : 6. Upon acquisition, all Leases for major equipment at Xuan were not recorded in Xuan's Asset accounts, but were expensed as Operating Expenses each year. REQUIRED: [A] Identify two instances where incorrect application of financial reporting framework was violating, leading to the risk of misstatement in Xuan's financial statements. [B] For the two instance in part [A], briefly explain WHAT would cause a misstatement 4: Paragraph v B I U .. acer On O A $ 4 % 5 3 & 7 6 8 9 0 e t u O d f g h K V b n m