Substantive Procedures Plant, Property and Equipment and using work of an Expert.

The next audit you will be conducting for your firm is for Haskins Manufacturing for the year ending November 30, 2020. You have been tasked with the audit of the companys plant, property and equipment.

This includes all buildings, land, machinery, and motorized vehicles.

Fifteen years ago, the buildings and land were purchased for $3.0 million. At the time of the purchase, a business valuator estimated that the land and building each had a value of $1.5 million. The buildings useful life is estimated at thirty years and depreciation is calculated on a straight-line basis.

A business valuator, who is not an employee of the company, valued the land and building at $6.0 million ($4.0 million for the land $2.0 million for the building. These new values will be incorporated in the financial statements for the year ending November 30, 2020.

Our firms partner is concerned about the large increase in the value of the land and buildings since they were purchased. You have been asked to check the reliability and accuracy of the valuation. It has been recommended that you review CAS 620 Using the work of an Auditors Expert would be a good guide for you.

In addition, you have been asked to validate the existence and completeness of the plant, machinery, and vehicles recorded in the companys books and computerized records (asset continuity records/schedules).

Required:

1) Describe five (5) audit procedures/work you would consider whether the valuator (third party expert) has provided an accurate and independent valuation of the land and buildings.

2) Describe five (5) audit procedures you would consider checking for the existence and completeness of the plant, machinery and motorized vehicles