CASE STUDY FOR FIXED ASSETS AUDIT You are an auditor of Vaccine Co, and you are assisting your team leader to prepare the audit program for the fixed assets of Corona International Hospital (Corona) for the year ended 31 December, 2020. Corona provides medical examination and treatment services. It is well-equipped with a variety of large and small medical machinery and equipment. Most of the modern medical machinery and equipment are funded by secured loans from a local bank. Corona also enteres some corporation contracts, of which Corona provides medical services and their partners contribute high-tech machines. Profit from the operation of these machines will be shared among these parties. Some companies (e.g those provide medicines or medical chemicals) are accepted by Corona to put their machinery and equipment in the hospital for Corona's usage without any duty. Fixed assets are managed and controlled by the departments using them. The department heads are responsible for the physical count of fixed assets and equipment using by their own departments at the year end. Copies of counting minutes are sent to the accounting department for reconciliation. Assets are depreciated using straigh-line method, except for machinery and equipment contributed by partners in coporation contracts, which is depreciated using reducing balance method. The finance director of Corona says that they are having four development projects. One of them, valued at $1,000,000 (included within intangible assets), does not meet the criteria for capitalisation. However, the finance director does not intend to change the accounting treatment adopted as she considers this an immaterial amount. Required: 1. Identify and explain audit risk in respect of the fixed assets assets presented in the financial statements of Corona for the year ended 31 December 2020. For each risk, recommend one auditor response. 2. Describe audit procedures you would perform in relation to the audit of fixed assets of Corona