1.The firm of VC & Co. in which you are employed is the external auditor of Company A whichis a company that operates a training centre providing IT engineers courses & photography courses. The company leased a flat in a commercial building located in Mong kok under an operating lease. The training centre promotes their IT engineers courses by providing powerful notebooks for students to use in class. At the same time, photographic equipment is provided to students to use when attending the classes of the photography courses. Recently, fewer and fewer students enroll on the photography courses, the directors consider not to offer those courses in the coming future. The company adopts the revaluation model for all the equipment.

Required:

(a)State and explain the assertions for the auditing of the account balances, additions and disposals of notebooks and photographic equipment.

(b)What is inherent risk?

(c)What are the inherent risks for the auditing of the notebooks and photographic equipment in this audit?

(d)What are the relevant assertions affected by these inherent risks? Explain.