The financial accountant of Sky-track Ltd. has provided you with the following breakdown of the movements onthe company's non-current assets for the year ended 31 December 2016.

Land Equipment Total

$'000 $'000 $'000

Cost

Balance at 1 January 2016 1,600 1,200 2,800

Additions 0 160 160

Revaluation 240 0 240

Disposals 0 (60) (60)

Closing balance at 31 December 2016 1,840 1,300 3,140

Accumulated Depreciation

Balance at 1 January 2016 0 720 720

Charge for the Year 0 272 272

Disposals 0 (50) (50)

Closing balance at 31 December 2016 0 942 942_

Net Book Value at 31 December 2016 1,840 358 2,198

The company does not depreciate its land and you, the company's auditor, agree that this is appropriate.

Equipment is depreciated at 20% per annum with a full year's depreciation charged in the year of acquisition and none in the year of disposal.

This is the company's first time revaluing the land. The revaluation was carried out by a reputable firm of auctioneers and values known to you.

The company maintains a non-current asset register that reconciles to extract from the nominal ledger above.

Requirement:

(a) Describe key internal controls that should be present regarding the non-current asset register before you could place reliance on it as a source of audit evidence.

(b) What audit work should be carried out on the depreciation charge and on the accumulated depreciation balance?

(c) Outline relevant tests that should be carried out to audit both the additions and the disposals of the equipment.

(d) Discuss any specific audit risks that might arise because of the revaluation and describe briefly, the audit work that should be carried out to address these risks. You may assume that the client has properly accounted for the revaluation.