Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. you are an auditor at a public accounting firm. yo

You are an auditor at a public accounting firm. You are conducting an audit for the...

80.2K

Verified Solution

Question

Accounting

You are an auditor at a public accounting firm. You areconducting an audit for the financial year ending December 31,2019. Your client has go public. This client is a propertydevelopment company. Your client builds property in the form ofapartment units, housing / real estate and also property investmentproducts in the form of lots ready to build. In addition, thisclient also has a project development cooperation with itscustomers. The client is bound by a contract signed by both partiesbefore a notary for the construction of a project with thiscustomer. The project has not been completed 100%, however, theclient says that the project has been completed 60% and the clientacknowledges 60% of the development as revenue in the 2019financial year.

a. In your opinion, as an auditor, what account should theclient classify the apartment and housing / real estate complex be?Explain your answer!

b.   What is the audit procedure that you will applyto ensure the recognition of revenue that is 60% of theproject!

c. What audit evidence will you examine and what are the relatedassertions? Explain your answer!

Answer & Explanation Solved by verified expert
3.8 Ratings (538 Votes)
a IFRS 15 provides that a Company can recognise revenue using the percentage of completion method when either of the following 3 conditions have been satisfied i the customer simultaneously receives and consumes the benefits provided by the entitys performance as the entity performs ii the entitys performance creates or enhances an asset for example work in progress that the customer controls as the    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Knowing what you know about how the line between good and evil is permeable, how might...

Psychology
Q

A viscous incompressible fluid is between two parallel plates (that are along the x-z plane), one...

Physics
Q

Illustrate with assumption(s) why “earth fault relay” is required for a 800A ACB protected circuit? (i.e....

Electrical Engineering
Q

Project Scenario: You are a journalist for a hometown newspaper. You have received a number of phone calls...

Statistics
Q

1 2 3 positive negative and zero sequence impedances are equal positive and negative sequence...

Physics
Q

Two particle of mass 4 kg 2kg are located as shown in figure then find...

Physics
Q

A car company tested a sports car on a road with different inclines. The test...

Basic Math
Q

3 A 0 Find the inverse matrix A 00 0 0 1 0 2 0...

Algebra
Q

1.Describe the global financial markets and their relation to financial reporting. 2.Explain the objective of...

Accounting
Q

Kris Kringle Company has one employee who is paid a salary of $8,000 per month....

Accounting
Q

Which of the following statements is correct with regard to direct material variances and/or direct...

Accounting
Q

Jackie's Snacks sells fudge, caramels, and popcorn. It sold 7,000 units last year. Popcorn outsold...

Accounting