Q1. Auditing Fixed Assets

You are planning the audit of Goanna Ltd, for the year ended 30th June 2021. Goanna is a large, multinational technology company operating out of Sydney, Australia, with substantial fixed assets.

Required:

1. In your own words thoroughly explain the audit objective related to Existence in the context of fixed assets at Goanna. Provide both a definition and an illustrative example.

2. Provide one example, made up by you and therefore in your own words, of an internal control that could be implemented by the management at Goanna to safeguard the existence of their fixed assets.

3. Provide one example, made up by you and therefore in your own words, that would put the Existence assertion for fixed assets at risk at Goanna.

4. Explain how the auditor could test whether the internal control you listed above effectively safeguards the Existence assertion for fixed assets at Goanna.