IAS 11 – Construction contract

Dear Sir

Please help, I’m having a panic moment, I can’t think how to answer.

Email from audit partner on discussion with audit client ‘…..review of matters from last year’s audit and modification of our report (except for lack of evidence to support the client’s schedules of estimated costs to completion)

Q: What audit risk to consider when planning the audit?

My weak answer: There’s a risk that the estimate costs to completion could be incorrect. With that in mind we need to ensure that analytical procedures for the estimates cost to completion will be part of the audit plan and the opening balance is as per the closing balance in our file note from last year.