Please help with this question.

Question 3 (8 points) Fixed Assets and Risk of Misstatement You are an auditor for Teper and Lubetsky and you have recently examined the Fixed Asset continuity schedule of Xuan Inc. The company reports under the IFRS financial reporting framework. You have made the following notes to yourself based on your investigation: 1. All fixed assets listed on the continuity schedule are in regular, productive use in Xuan. 2. Most additions to fixed assets and most disposals of fixed assets were properly recorded on the continuity schedule, while two instances were found where these amounts were expensed in the fiscal year in which they were paid. 3. Payments made for work performed on all fixed assets for the purpose of keeping the assets operating at their intended use and life were recorded in the "Repairs and 6 Maintenance" accounts. 4. Payments made for work performed on all fixed assets for the purpose of extending the life or expanding the capacity of the assets were capitalized and thereby recorded as addition to the fixed asset accounts. Activate V Go to Setting 5. Upon purchase of all fixed assets, the installation and freight costs that were used4. Payments made for work performed on all fixed assets for the purpose of extending the life or expanding the capacity of the assets were capitalized and thereby recorded as addition to the fixed asset accounts. 5. Upon purchase of all fixed assets, the installation and freight costs that were used to bring the asset to its state of intended use were expensed in the fiscal year in which they were paid. 6. Upon acquisition, all Leases for major equipment at Xuan were recorded as a Capital Lease and therefore a fixed asset was established in Xuan's accounts. REQUIRED: [A] Identify two instances of incorrect application of the financial reporting framework, leading to the risk of misstatement in Xuan's financial statements. [B] For the two instance in part [A], briefly describe the nature and cause of the potential misstatement. STUDENT RESPONSE BELOW