Case 2: You have been hired as audit supervisor of KMR co. During the meeting you have been informed about the issues found in the organization after the process of audit risk assessment. You have been assigned for the audit of work in progress. You are also going to be a part of the team which will attend the year-end inventory count along with the final audit. The work in progress contains the cars which are partly assembled and the value of this is anticipated to be material. The company values work in progress in accordance with the percentage of completion. The standard costs are then considered and applied to the percentages calculated. The company hires an independent valuer for the valuation of work in progress. The partly assembled cars are then shipped to its subsidiary unit in America for completion and sales. The said inventory is in transit for 2 weeks. Required:

a. What factors the company should consider when placing reliance on the work of an independent valuer. (Marks 2)

b. What audit procedures should be adopted to ensure the correct record of WIP? (3 marks)