Revaluation of property, plant and equipment (PPE):

 Discuss with management the assumptions used in the revaluation of all

the PPE and assess these assumptions are reasonable and obtain the
written representation from management as a supporting document.
 Enquire the valuer’s professional qualification, professional knowledge and
skills and relevant experience to ensure he is capable enough to rely upon
his valuations.
 Review the revaluation report to confirm that all the non-current assets of
the same class are revalued as per IAS 16 and also inspect the NCA register
to ensure these are updated correctly.
 Review the disclosure note made in the financial statements related to
revaluation to confirm that all the necessary information is mentioned in
disclosure note and it is in accordance with IAS 16.
 Recalculate the depreciation charge for the year of the revalued assets to
confirm the depreciation is based on the correct valuation and is for 12
months.
 Recalculate the total revaluation adjustment to ensure it is correctly
recorded in revaluation reserve.

Inventory valuation:

 Obtain the schedule of all the raw material, work in progress (WIP) and
finished goods and cast them down to confirm the accuracy and
completeness of balance and agree them to the trial balance and financial
statements.
 Obtain the breakdown of the work in progress (WIP) and recalculate it to
confirm the percentage of completion is accurate.
 Discuss with management about there plans for disposing off compound
E243 and find out why they believe that this defective compound has NRV
of $40000.
  Review the disclosure note regarding to inventory valuation and WIP to
confirm its adequate and according to IAS 2.
 IF any compound E243 has been sold post year end, agree with the sales
invoices to assess the NRV.
 Review the aged inventory report to find any slow-moving items and
discuss with management why these items are not written down or if the
allowance is required.
 To agree, the compound E243 is valued correctly at $72000, review the
supporting documents to assess the raw material cost, labour cost and any
overheads absorbed into the cost.
 Confirm the final adjustment for compound E243 is $32000 ($720-$400)
and discuss with management that this adjustment has been made and if
so follow through the documents to confirm it.

Bank Loan:

 Compare the cashbook and bank statement to confirm the loan

repayments made have been correctly recorded by both parties.
 Agree the opening bank loan figures with the previous years audited
financial statements to confirm the correct figures are carried forward.
 Review the bank correspondence to identify any penalties charged for late
payments in April and July have been made, and agree this has been
charged to the profit or loss accounts as a finance cost.
 Review the disclosure notes to confirm they are adequate that the loan is
disclosed as current liability and disclosure is in accordance with accounting
standards and local legislation.
 Review the bank agreement for bank covenants and recalculate them to
identify if any breaches made to them.