Reference no: EM132654542

Problem 1: Discuss at least three potential fraud schemes related to property, plant and equipment.

Rivers & Associates is the auditor for a manufacturing company with a balance sheet that includes the line item 'Property, plant and equipment'. The company has noted the following events in relation to 'Property, plant and equipment'.

1. A block of land was acquired during the year. The land is the future site of the client's new headquarters, which will be constructed in the following year.

2. Clearing costs were incurred to make the land ready for construction. 3. During the land-clearing process, timber and gravel were recovered and sold.

Required:

Problem 2: Identify the audit objectives (assertions) for 'Property, plant and equipment', and indicate the main substantive tests relating to each.