AUDIT QUESTION:

Background information

Assume that your audit partner asks you to design detailed substantive testing programs for accounts receivable and sales; inventory; purchases and accounts payable; and payroll systems of Air New Zealand. Your partner also asks you to incorporate specific analytical procedures and tests of detail (i.e. direct tests on balances and tests of transactions of a balance).

Note that- identified weaknesses and other issues, as described in each of the following subsystem, are no relationship to events relating to Air New Zealand, nor does it apply to any other organization.

Required: Design/develop a substantive audit tests program and explain & justify your audit program in terms of audit objectives (also called audit assertions)

Fixed Asset Subsystem: Controls are generally strong, however you discovered that management is not transparent about how they assess the value of some of the Intangible assets and derivative financial instruments. Assume that Air New Zealand management informed you that they have will adopted the new NZ IFRS 16 Leases for 2020 annual report.