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You are employed by Walter Williams LLP Chartered Accountants and you are the audit manager on the annual audit assignment of Curtiss Construction PLC, which

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You are employed by Walter Williams LLP Chartered Accountants and you are the audit manager on the annual audit assignment of Curtiss Construction PLC, which is involved in the construction of residential housing and office buildings. During the year ended this company achieved: Turnover 852 million Gross Profit 145 million Profit before Tax 58 million Profit after Tax 47 million Curtiss Construction PLC also has an investment property portfolio with offices and industrial buildings that are let to third parties. During the year ended 31 March 2021 Curtiss Construction PLC received a substantial claim for damages, which could be as high as 25 million, from a customer of the company because of faults in a building that Curtiss Construction PLC had constructed. This claim included the cost of repairs and damages since the customer claimed that it was necessary to pay for alternative accommodation as the faulty building could not be used. Curtiss Construction PLC has obtained advice on the likely outcome of the claim from a major firm of solicitors who have suggested that there is a strong chance that Curtiss Construction PLC will have to compensate the customer for most of the claim of 25 million. In the year-end financial statements the investment property portfolio had been revalued by an independent chartered surveyor (a fully qualified valuer) and the long-term contract work in progress had been valued by a company employee who is also a fully qualified valuer. Required: Analyse the critical matters for consideration and indicate the other evidence you would obtain to enable you to assess the reliability of the work of experts in the following areas and explain your decision in each case: a) Legal advice obtained from the firm of solicitors on the outcome of the claim against Curtiss Construction PLC. (9 marks) b) Valuation of the investment properties by the independent chartered surveyor. (9 marks) c) Valuation of the long-term contract work in progress by the Internal valuer. (6 marks) (Total 24 marks) You are employed by Walter Williams LLP Chartered Accountants and you are the audit manager on the annual audit assignment of Curtiss Construction PLC, which is involved in the construction of residential housing and office buildings. During the year ended this company achieved: Turnover 852 million Gross Profit 145 million Profit before Tax 58 million Profit after Tax 47 million Curtiss Construction PLC also has an investment property portfolio with offices and industrial buildings that are let to third parties. During the year ended 31 March 2021 Curtiss Construction PLC received a substantial claim for damages, which could be as high as 25 million, from a customer of the company because of faults in a building that Curtiss Construction PLC had constructed. This claim included the cost of repairs and damages since the customer claimed that it was necessary to pay for alternative accommodation as the faulty building could not be used. Curtiss Construction PLC has obtained advice on the likely outcome of the claim from a major firm of solicitors who have suggested that there is a strong chance that Curtiss Construction PLC will have to compensate the customer for most of the claim of 25 million. In the year-end financial statements the investment property portfolio had been revalued by an independent chartered surveyor (a fully qualified valuer) and the long-term contract work in progress had been valued by a company employee who is also a fully qualified valuer. Required: Analyse the critical matters for consideration and indicate the other evidence you would obtain to enable you to assess the reliability of the work of experts in the following areas and explain your decision in each case: a) Legal advice obtained from the firm of solicitors on the outcome of the claim against Curtiss Construction PLC. (9 marks) b) Valuation of the investment properties by the independent chartered surveyor. (9 marks) c) Valuation of the long-term contract work in progress by the Internal valuer. (6 marks) (Total 24 marks)

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