ACA ARR TYU 2 Chapter 5 by Amani Hasnah Binti Supian

Valuer

2026-01-07 16:05:26 UTC

Obtain physical copy of external valuation and assess its reasonableness. Research into valuation provider to determine if they are competent and research into if there are any relationships with the client that could affect independence. Agree amount per external valuation to amount per FS.

2026-01-07 16:05:49 UTC

Once we've gained assurance over the percentage calculation. Perform a reperformance of a sample of WIP items sampled from the listing.

Ensure the recalculated cost does is not larger than the NRV.

Link this testing to the purchase testing and payroll section as these values are included in WIP.

Independence of valuer

2026-01-07 16:05:54 UTC

Check the credentials of the valuer and obtain report

Confirmation from valuer re: premises calculation methodology

2026-01-07 16:06:09 UTC

Receive confirmation of the valuer's calculation methods and inspect their methodology to verify if it is accurate and that a reasonable amount is to be included in the FS.

Competence of valuer

2026-01-07 16:06:11 UTC

Review and assess the qualifications of the external valuer, see if they are apart of a professional body. Also, enquire with management and the valuer to determine whether they are independent of each other.

2026-01-07 16:06:21 UTC

Inspect and verify title deeds and corresponding sales invoice to ensure correct rights and ownership of premises.

System Integration

2026-01-07 16:06:58 UTC

Perform walk throughs to check that items posted from purchases and payroll system correctly transfer onto job costing system.

2026-01-07 16:07:06 UTC

Inspect the internal system to assess how well the purchases and payroll system has integrated with the job costing system correctly

Judgement / Estimation

2026-01-07 16:07:19 UTC

Enquire the external valuer on what basis they have revalued the freehold premises to assess whether this was reasonable. Can compare to similar properties, and make further enquires should there be a significant difference.

WIP Value estimations

2026-01-07 16:07:43 UTC

-inquire basis of WIP valuation

obtain original quote given to insurers and compare against schedule of works completed to date to identify ...
Discuss with management regarding the needs for prvision for loss making contract
-recalulated the WIP value based on information obtained

Item 2

2026-01-07 16:07:44 UTC

recalculate revaluation adjustment to verify accuracy and confirm the amount in the financial statements

Property Value

2026-01-07 16:07:57 UTC

Reperform Calculation of the value of the company's freehold premises on basis of external valuer to check for accuracy, valuation and allocation. Compare this calculation with the of the external valuer for any under/overstatement.

Valuer

2026-01-07 16:08:01 UTC

If issues arise from the valuers qualifications, obtain an independent valuation to test the accuracy of the valuation.

2026-01-07 16:08:20 UTC

Inspect the bank loan agreement to identify any relevant covenants and confirm the disclosure of the charge is accurate

2026-01-07 16:08:38 UTC

Inspect expert valuers report to understand the valuation method, assumptions and data used. Compare this to available property market data to confirm reasonableness.

2026-01-07 16:08:48 UTC

Enquire with management the reason for using the higher of the valuations and assess for reasonableness

Management accounts

2026-01-07 16:08:53 UTC

- Enquire management about how management accounts have been calculates and assess it reasonableness

- Obtain the management account calculations and confirm the process

- recalculate the management accounts to confirm mathematical accuracy

Risk: Valuation report is incorrect due to incompetence/lack of independence of valuer

2026-01-07 16:09:03 UTC

Obtain the valuation report and ensure that

1) Valuer is not a related party

2) Valuer registered with regulatory body

If Valuer not independent, consider using an expert to ensure valuation is accurate.

Loan

2026-01-07 16:09:13 UTC

Enquire management and observe the loan documentation

reconcile/recalculate the interest repayments posted in the accounts to address the accuracy assertion

2026-01-07 16:09:35 UTC

Asses and review the NCA register to ensure all assets within the freehold premises class have been revalued, which can reduce the risk of selectively reevaluating.

Valuation

2026-01-07 16:09:39 UTC

Obtain basis for valuation which directors intend to use and verify credentials and relationship to directors of external valuer.

Also, recalculate depreciation to check for mathematical accuracy and to compare to revalued amount for reasonableness

Valuation

2026-01-07 16:09:42 UTC

Inquire management about the revaluation and inquire to view the revaluation done by external valuer to ensure that the premises that were included in revaluation are complete. To ensure that management did not only revalue the properties that they believed would have increased in value in order to overstate the property value in order to acquire for favourable bank loan.

Risk during integration of purchase and payroll systems

2026-01-07 16:10:06 UTC

Perform walkthroughs on items within the purchase and payroll systems to ensure completeness and existence. Once this has been tested and the figure confirmed, re-perform the integration to ensure its accuracy.

Management Accounts

2026-01-07 16:10:10 UTC

Enquire management's basis of attributable overheads in the management accounts and assess the reasonableness.

Obtain the attributable overheads and confirm these are correct in the management accounts.

Recalculate the percentage to confirm mathematical accuracy.

WIP Estimations

2026-01-07 16:10:10 UTC

To assess the accuracy of the percentage calculation used in the WIP, obtain a copy of the previous year's WIP calculations and compare them to the actual results when the work was actually completed.

Valuation of property

2026-01-07 16:10:12 UTC

Obtain own calculation of Freehold premises valuation. Basis of external information about property similar size, recent sales within similar location. Compare own valuation to external valuer and see if it variance is reasonable.

External Valuer

2026-01-07 16:10:15 UTC

Confirm the validity of the external valuation by obtaining another valuation from an independent source and comparing it to the original valuation of the companies freehold premises to see if it was an accurate representation.

Management accounts used for WIP

2026-01-07 16:10:19 UTC

perform directional testing for P&L transactions to investigate the accuracy of the management accounts

2026-01-07 16:10:32 UTC

Inspect samples of payroll timesheets and invoices to assess the Accuracy of the job costing system to ensure accuracy of WIP

WIP

2026-01-07 16:11:27 UTC

First gain assurance over the internal control systems. Once we have obtained this, we would recalculate the WIP values based on information gained from our own observations, asking the relevant people and looking at the relevant documents. We would then compare to the figure given to get the difference between our figure and the one provided to see how accurate the figure provided is.