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Explain how and why PPE would be at risk of misstatement

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Reference no: EM133010681

Question - Performance measures - Unifactor provides equipment to the construction industry. The following is an extract of its unaudited 2019 financial report in relation to the property, plant and equipment (PPE) account:

The auditor was appointed in November 2015. The new auditor is aware that there were major repairs conducted during the period commencing 27 April 2016 with an expected completion date of 30 July 2016. Discussions between the auditor and management of Unifactor indicate that there is a risk that Unifactor will capitalise all repair costs to minimise the impact on expenses.

Required - Explain how and why PPE would be at risk of misstatement is there is not good controls over the treatment of repair costs.

Reference no: EM133010681

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