Tron Lumber had 20 additions to the fixed asset equipment account during the past year. Describe how you could perform a substantive test to audit these additions whose amounts are material.

a. What assertion are you testing for this asset account?

b. Prepare a sampling plan to perform the test. The desired level of assurance is 90% (10% risk of incorrect acceptance). The ratio of estimated misstatement to tolerable misstatement is 0.00. The materiality level is $10,800,000, and the population is $120,000,000. The auditor uses 75% of materiality as the tolerable misstatement.

c. Explain how you will evaluate the results of your sample. State clearly the possible conclusions of your tests.

d. If the additions are not audited by sampling, what other method could you use to gather substantive evidence? Explain your answer.