Question 1

This is an excerpt from the trial balance for Sinclair Pastoral Group (SPG). Performance materiality for the trial balance has been assessed as $4.2M for 2020 and $3.9M for 2019 at 70% with a moderate risk of material misstatement. Control risk has been assessed as high for these three accounts. Use the numbers in the first column to record your response.

1. Discuss the inherent risk assessment for each account
2. Discuss how you would apply materiality to each account
3. Discuss the audit impact of the above assessments on each account; and
4. Provide an overall conclusion about the audit approach for this group of accounts

No.	Account Name	2018 Ms	2019 Ms	2020 Ms
1	Livestock	421.88	252.33	285.97
2	Pastoral property & improvements at fair value	591.16	738.46	810.56
3	Industrial property & improvements at cost	20.17	31.28	30.99