Land and Building Valuation

AAA – Nov 2017 – L3 – Q6 – Audit Reporting

Discuss audit report modifications, draft modified report on grant treatment, and analyze auditor’s responsibilities regarding asset valuation.

Question

During the audit of fixed assets for Next Engineering Plc as of December 31, 2016, two issues were encountered:

The cost calculations for direct labor on assets under construction were destroyed, with the direct labor cost totaling ₦20,000,000.
A government grant of ₦50,000,000, received for plant and equipment purchased during the year, was fully credited to the income statement as an exceptional item, though the plant and equipment have a 10-year useful life.

Requirements:
a. Discuss the general forms of modifications available to auditors in drafting their report and specify circumstances for each form.

(6 Marks)
b. Assuming a modified audit report is necessary regarding the government grant treatment, draft the relevant section (entire report not required).

(5 Marks)
c. Analyze the auditor’s general responsibility concerning the directors’ report on land and building valuation.

(4 Marks)

Answer

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Tags: Auditors' responsibilities, Fixed Assets, Government Grant, Land and Building Valuation, Modified Audit Report
Level: Level 3

Topic: Audit Reporting
Series: NOV 2017

AA – Nov 2018 – L2 – Q4b – Audit and Assurance Evidence

Explains audit procedures for verifying the valuation of land and buildings in the financial statements.

Question

b. At a meeting to deliberate with management on the draft financial statement of E.T Company Ltd, the external auditors, Sampson Amarty and Co., a firm of Chartered Accountants, demanded that management should explain how an amount of GH¢200,000 for land and building in the financial statements had been arrived at. The Managing Director asked the Director of Finance to explain how the amount of GH¢200,000 was arrived at. The Director of Finance explained that the amount of GH¢200,000 was given to them by an external valuer, S.K. Valuation Experts.

Required:
Explain the audit procedures that would be adopted in verifying the land and building value in the financial statements. (7 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Procedures, Financial Statements, Land and Building Valuation, Verification
Level: Level 2

Topic: Audit and Assurance Evidence
Series: NOV 2018

AAA – Nov 2017 – L3 – Q6 – Audit Reporting

Discuss audit report modifications, draft modified report on grant treatment, and analyze auditor’s responsibilities regarding asset valuation.

Question

During the audit of fixed assets for Next Engineering Plc as of December 31, 2016, two issues were encountered:

The cost calculations for direct labor on assets under construction were destroyed, with the direct labor cost totaling ₦20,000,000.
A government grant of ₦50,000,000, received for plant and equipment purchased during the year, was fully credited to the income statement as an exceptional item, though the plant and equipment have a 10-year useful life.

Requirements:
a. Discuss the general forms of modifications available to auditors in drafting their report and specify circumstances for each form.

(6 Marks)
b. Assuming a modified audit report is necessary regarding the government grant treatment, draft the relevant section (entire report not required).

(5 Marks)
c. Analyze the auditor’s general responsibility concerning the directors’ report on land and building valuation.

(4 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Auditors' responsibilities, Fixed Assets, Government Grant, Land and Building Valuation, Modified Audit Report
Level: Level 3

Topic: Audit Reporting
Series: NOV 2017

AA – Nov 2018 – L2 – Q4b – Audit and Assurance Evidence

Explains audit procedures for verifying the valuation of land and buildings in the financial statements.

Question

Required:
Explain the audit procedures that would be adopted in verifying the land and building value in the financial statements. (7 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Procedures, Financial Statements, Land and Building Valuation, Verification
Level: Level 2

Topic: Audit and Assurance Evidence
Series: NOV 2018

Question Tag: Land and Building Valuation

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AAA – Nov 2017 – L3 – Q6 – Audit Reporting

Discuss audit report modifications, draft modified report on grant treatment, and analyze auditor’s responsibilities regarding asset valuation.

AA – Nov 2018 – L2 – Q4b – Audit and Assurance Evidence

Explains audit procedures for verifying the valuation of land and buildings in the financial statements.

AAA – Nov 2017 – L3 – Q6 – Audit Reporting

Discuss audit report modifications, draft modified report on grant treatment, and analyze auditor’s responsibilities regarding asset valuation.

AA – Nov 2018 – L2 – Q4b – Audit and Assurance Evidence

Explains audit procedures for verifying the valuation of land and buildings in the financial statements.

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Question Tag: Land and Building Valuation

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AAA – Nov 2017 – L3 – Q6 – Audit Reporting

Discuss audit report modifications, draft modified report on grant treatment, and analyze auditor’s responsibilities regarding asset valuation.

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AA – Nov 2018 – L2 – Q4b – Audit and Assurance Evidence

Explains audit procedures for verifying the valuation of land and buildings in the financial statements.

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AAA – Nov 2017 – L3 – Q6 – Audit Reporting

Discuss audit report modifications, draft modified report on grant treatment, and analyze auditor’s responsibilities regarding asset valuation.

You're reporting an error for "AAA – Nov 2017 – L3 – Q6 – Audit Reporting"

AA – Nov 2018 – L2 – Q4b – Audit and Assurance Evidence

Explains audit procedures for verifying the valuation of land and buildings in the financial statements.

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