wager invenholy the comparative period. Enquire luchiatrend A differences licks a random sample of inventing Obtain the relevant purchase invoices 4 apply the inventory costing method to recalculate the related 031/12/ 20 inventory I values based onitem prices displayed on the invoices . compare the calculated results with inventory dishing & investigate differences . All audit work has been completed ( inclusive of, Moredues 1 1 3 - 1.5 ) 4 there is one finding weted to file Beltel imported $ 5.4 million Hi-Phones' from a new supplier on 1/12/ 20 to be sold in Australia. After receiving the shipment, it was discovered that the devices are not compatible with Australian mobile networks . The purchasing contract stipulates that the supplier will not be addto held liable for any network incompatibility issues A Bel not insured for purchasing Allw failing to contact the supplier after several atempis Pee BelTel's legal Team has finally found a porential buyer who is willing to buy the phones from BelTel for $0 1 million, The legal team has advised Belted to take this offer a management is in the process of finalizing the documentation to accept this As at 31 / 12/20 the phones remain recorded at cost of $ 5.4 million A there is no provisions for inventory write-down recorded in relation to them. There is no disclosure of this matter in the notes to the draft half-year financial report * management s refusing to make any changes to The report, because the purchas- ingJ manager who authorised this order . .. 2Question 4 (20 marks ) Part A ( 11 marks) You are a serious auditor in corridor Auditors ( CAJ - a medium sized practice in Australia offering wide range of services. For last 3 years . Of has been the independent auditor ) Bel Tel limited ( Bel Tel) a local distributor of mobile devices. BelTel has 30 June year-end & is listed on Australian Securities Exchange. Beltel is required to prepare 31 / 12/ 20 half - year financial report s have it reviewed by its independent auditor. you are finalising the mocedures on 31 / 12 / 20 hall - year financial report. overal materiality is set at $3 million . There are only 3 procedures in the engagement file the address the assertion of accuracy of valuation a allocation of 1 inventorly hocedur 1.3 : Enquire of management as to whether there have been any changes in Bel Tels inventory costing mehoods since the year ended 030 / 6 / 20 . where there have been changes , evaluate whether they are appropriate under Australian standards 4 consider the consistency with which inventory valuation methods have been applied. Procedure 1,4: Perform analytical procedures by comparing the current period inventory turnover & balances If major invenholy categories with the comparative period. Engine into major fluctuations a differences. Procedure 1.5 : selects a random sample of inventory items from the inventory listing as at 31/12) 21. Oco with me balances procedures by period inventory. major fluctuatin companer 2 1. 5 . has been terminated so this poblem will not Management has also scared that because tothe inventory is $47 million at 31 / 12/ 20 the value on to Hi- Phones is not material and that xleg the lack that this issue is not yet resolved poses no threat to BelTel's going concern ability . Based on our procedures performed we agree that this issue does not cause any material uncertainty regarding going concern . Part A (11 marks ( a) Identify the applicable standard and the level of assurance required for this engagement. ( 2 marks ) Identify a explain which procedure above is not getinany ordinarily required for this type to engagement 12 marks ( c) Design an additional procedure to address two accuracy, valuation A allocation of inwinstony for this type of engagement ( 2 marks ) " d ) Determine & justify the appropriate assurance conclusion ! Explain fristher implications ( if any) for the assurance report (excluding the "other information" paragraph ) ( Smarks ) 3