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Is these risks and responses correct?
– Land & buildings will be revalued at year end. The risk is that a higher amount than on the valuators report is included on the SOFP causing NCA to be overstated.
I will obtain the valuators report and check that the figure on the valuators report is the same as on the SOFP.
– $1 million was raised through shares and $2.5 million through a long term loan. The risk is that all cash received might not be recorded and shares more than authorized can be issued.
I will check that for a sample of shares issued, the cash has been recorded as Dr Cash, Cr OSC.
I will obtain the companies articles and verify the authorized share capital. Then I will check that issued capital does not exceed authorized.Will I loose any marks?
1 Could be higher or lower than the valuer’s report. Instead of saying higher/lower say ‘materially misstated’. Response fine.
2 Seems OK to me.
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