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34. You have been the auditor of Wing Fu Berhad for many years. The company is a large manufacturer with factories located in China. The
34. You have been the auditor of Wing Fu Berhad for many years. The company is a large manufacturer with factories located in China. The factories maintain their own accounting records. Three years ago the company appointed an internal auditor, Roger Tan, who works out of the corporate head office and is independent of any factory. Your practice has been to examine Roger's audit programs, discuss them with him, and review the results of his work. Roger visits each factory at least once annually. Until now, he has never concerned himself with fixed assets. This year, however, he intends to carry out the following procedures at all factories: (g) Ask about possible obsolescence of any machinery that the machine-hour records show to be idle for extended periods. Or Suggest alterations or additions to Roger's proposed audit program covering factory fixed assets that you might suggest to increase its effectiveness
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