You are an auditor working in a public accounting firm, you are assigned by a partner to handle a company client for the financial year 31 December 2015. The following is what you encounter in auditing the client: 1. In 2015 there will be additions in the form of a new building used as an office and garage by the company. The value is material enough to make the ending balance of non-current assets much larger than the previous year. What audit procedures will you carry out, and what audit evidence is needed to ensure that the new building does exist, and does belong to the company?

2. As in previous years, there were repairs to operational car vehicles. However, this year some repair costs were not recognized as an expense in the income statement, but were capitalized by the client. Client said that the improvements were major, and extended the economic life. Is the capitalization allowed? What audit evidence do you need to examine the transaction?

3. Bank loans has a material value. What audit procedures will you perform to ensure that short-term and long-term bank loans are properly classified by the client? 4. Interest expenses on bank loans has a material value. What audit procedures do you perform to ensure that the client reports interest expense correctly?