You are the auditor for Heuristics Ltd, who is in the medical industry. On review of the companys draft financial report for the year ended 31 July 2019, the engagement partner observes that a substantial amount of equipment is shown in the Statement of Financial Position. You are currently evaluating the inherent risk of Heuristics Ltd.

Required

1. Identify and explain three (3) factors the auditor would consider in assessing the inherent risk for PPEs.

2. What factors will you consider in selecting samples from the population of Property, Plant, and Equipment (PPE) for substantive testing?