Question

Refer the following list of assets of financial year 2018 - Furniture OMR 250, Building    OMR 15000, Inventory OMR 600, Car OMR 3500, Debtors OMR 700. Assets revalued in financial year 2019 as - Furniture OMR 220, Building OMR 16000, Inventory OMR 750, Car OMR 2500, Debtors OMR 500. Additional Information - Cash remain unchanged. You are required suggest the suitable technique of audit to check revalued assets with explanation for the listed assets.

Answer 1

1.Filling assets has been revalued upward.

Building.

Inventory

2.Revalued downward assets are

Car

Furniture

Debtors

3.Suitable techniques of audit.

Auditor should verify the basis and need for revaluation of assets, whether it is appropriate and it is supported by Valuation report or Expert report. further auditor should verify that revaluation in books has been done as per valuation report and GAAP and has been appropriately shown in Auditor's report.

4. In case of building valuation report can be obtained.

In case of inventory it's to be recheck the reasons as inventory must be valued at cost or net realisable value whichever is lower as per standard.

5. Further value of furniture and car is reduced may be due to impairment same to be analysed.

Debtors value is revalued may be after taking the amount of provision of doubtful debts.

Pls like if logic explained