Question
The sample from the non-current asset subsidiary ledger of audit client has brought into focus the replacement of several material Property, Plant & Equipment (PPE)
The sample from the non-current asset subsidiary ledger of audit client has brought into focus the replacement of several material Property, Plant & Equipment (PPE) assets in use at several remote locations in Western Queensland. The PPE assets are very specialised in nature and had been individually engineered to specification and their operation is crucial to your clients success. You consult with your engagement manager and partner and they decide it will be necessary to undertake an additional substantive procedure for these assets, having the assets inspected on location.
- What requirement for quality control is being illustrated by your (the audit supervisor) seeking the advice of your manager and engagement partner? Be sure to also indicate the relevant ASA number and paragraph. (2 marks)
- You ask the new engagement team member which assertion they would be primarily testing when applying the additional substantive procedure of inspecting these PPE additions on location for this client? (2 marks)
- You ask the new engagement team member to describe any pragmatic and professional implications your engagement team might explore (that is, discuss possible alternatives) as options for reliable ways to gather sufficient appropriate audit evidence to satisfy the primary assertions for the PPE additions in this scenario. (6 marks)
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