You have been asked to carry out the audit of the property plant and equipment of Simons Engineering Limited for the year ended 31 March. The draft accounts show the following movements on non current assets in the year:

During the current year ended 31 March the company purchased some land and built a new factory, which was completed during the year.

• The company maintains a PPE register for all information related to property plant and equipment, and it depreciates its fixed assets at the following rates:
  • Land and buildings 2% on cost
  • Plant and machinery 10% on cost
  • Motor vehicles 25% on cost
• It is the companys policy to charge a full years depreciation on assets in the year of purchase and no depreciation in the year of sale.
• Required;
• (a) List and describe the audit tests you would perform to verify the amounts shown in property plant and equipment in the companys accounts for the current year ended 31 March.
• (b) If the company did not maintain a PPE register, describe the problems you would experience and how it would affect your audit work and opinion .

Freehold Plant & Motor TOTAL Land & Machinery Vehicles Buildings Cost or Valuation GHC GHC GHC GHC + At 1st April 353,000 406,000 173,000 932,000 Additions 292,000 86,000 65,000 443,000 Disposals (29,000) (47,000) (76,000) At 31st March 645,000 463,000 191,000 1,299,000 + Freehold Plant & Motor TOTAL Land & Machinery Vehicles Buildings Depreciation GHC GHC GHC GHC At 1st April 132,000 187,000 74,000 393,000 Charge for the year 12,900 43,000 42,000 97,900 On disposals (25,000) (32,000) (57,000) At 31st March 433,900 144,900 500,100 205,000 258,000 84,000 107,000 NBV at 31st March 865,000 Freehold Plant & Motor TOTAL Land & Machinery Vehicles Buildings Cost or Valuation GHC GHC GHC GHC + At 1st April 353,000 406,000 173,000 932,000 Additions 292,000 86,000 65,000 443,000 Disposals (29,000) (47,000) (76,000) At 31st March 645,000 463,000 191,000 1,299,000 + Freehold Plant & Motor TOTAL Land & Machinery Vehicles Buildings Depreciation GHC GHC GHC GHC At 1st April 132,000 187,000 74,000 393,000 Charge for the year 12,900 43,000 42,000 97,900 On disposals (25,000) (32,000) (57,000) At 31st March 433,900 144,900 500,100 205,000 258,000 84,000 107,000 NBV at 31st March 865,000