Substantive procedures

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Substantive Procedures 

Heavy Equipment Ltd (HEL) has been an audit client of GBB Partners for many years. You are an audit senior and have been assigned to the HEL audit for the first time for the financial year end 30 June 2014. During May 2017 you are completing the risk assessment for Property, Plant and Equipment (PPE), which is a material account. You are aware that HEL has made a large investment in a new manufacturing process to place itself in a more competitive position. Your analytical procedures indicate that acquisitions of PPE have increased during the year.

Required:

A) What are the key assertions for the PPE additions in HEL? Explain your answer.

B) Identify the relevant substantive tests of details that would be appropriate to address the assertions identified in a) above.

C) How would your answers to questions a) and b) change if the PPE additions were manufactured by HEL’s own engineers and builders, rather than purchased from outside suppliers.

Reference no: EM131735050

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