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AUE3761 TEST 4
, ### 1. Substantive Procedures to Audit the Investment Property Balance
To audit the investment property balance of BidShirt (Pty) Ltd as at 31 December 2023, the
following substantive procedures should be performed:
1. **Obtain the Purchase Agreement**:
- Inspect the purchase agreement and other related documents to confirm the purchase
price and the date of acquisition of the land.
2. **Verify Ownership**:
- Inspect the title deed of the land to confirm BidShirt (Pty) Ltd’s ownership.
3. **Recalculate the Fair Value**:
- Obtain the valuation report from the third-party property valuation expert.
- Recalculate the fair value of the land based on the methods and assumptions used in
the valuation report.
4. **Evaluate the Valuation Methodology**:
- Assess the appropriateness of the valuation methods, assumptions, and estimates used
by the third-party property valuation expert to determine the fair value.
5. **Inspect the Marketing Efforts**:
- Review documentation (e.g., advertisements, listings) to verify that the land was
marketed for sale and that the sale is highly probable within the next 12 months.
6. **Review Directors’ Minutes**:
- Inspect the minutes of the directors’ meetings to confirm the resolution to sell the land
and the timeline of this decision.
AUE3761 TEST 4
, ### 1. Substantive Procedures to Audit the Investment Property Balance
To audit the investment property balance of BidShirt (Pty) Ltd as at 31 December 2023, the
following substantive procedures should be performed:
1. **Obtain the Purchase Agreement**:
- Inspect the purchase agreement and other related documents to confirm the purchase
price and the date of acquisition of the land.
2. **Verify Ownership**:
- Inspect the title deed of the land to confirm BidShirt (Pty) Ltd’s ownership.
3. **Recalculate the Fair Value**:
- Obtain the valuation report from the third-party property valuation expert.
- Recalculate the fair value of the land based on the methods and assumptions used in
the valuation report.
4. **Evaluate the Valuation Methodology**:
- Assess the appropriateness of the valuation methods, assumptions, and estimates used
by the third-party property valuation expert to determine the fair value.
5. **Inspect the Marketing Efforts**:
- Review documentation (e.g., advertisements, listings) to verify that the land was
marketed for sale and that the sale is highly probable within the next 12 months.
6. **Review Directors’ Minutes**:
- Inspect the minutes of the directors’ meetings to confirm the resolution to sell the land
and the timeline of this decision.
