Question 2 You have been assigned to the audit of property, plant and equipment at Brett’s IT Ltd (BIT). The majority of BIT’s property, plant and equipment (PPE) are personal computers (PCs) and associated network hardware. As the value components associated with the network are material, you have some concerns regarding the best way to proceed with the audit of the PCs. You have discussed the nature and extent of equipment held with Todd, the IT manager at BIT, who told you the following:  Each PC is barcoded on installation and the detail is given to the accounting area. Todd indicated that each section manager is responsible for ensuring all barcodes are accounted for annually.  All PCs arc compulsorily retired either in three or four years depending on their condition toward the end of the second year. At this point they are scrapped; however, the IT department keeps a small number for spare parts (monitors, keyboards and so on).  Equipment and network installation is repaired, retired or added to as required. Whenever a new piece of equipment is purchased, the purchase is arranged by the accounting section and the record of purchase held in that area. Todd periodically notifies the fixed assets clerk of any equipment that has been scrapped. Given the last comment, you are now concerned about the validity of the balances recorded for network equipment and ask the fixed assets clerk to explain how he know everything is accounted for. He replies ‘Frankly, I have no real idea what is physically still in that area; I just know what we purchased and I rely on Todd to tell me what to write off'. Required: a) Select three procedures that you could use to audit the computer equipment held by BIT, identifying the assertion(s) tested for each procedure. b) Discuss the merits of each procedure in relation to their reliability and their cost. c) Apart from PPE (asset), Identify other accounts that may be impacted based on the information you are given in the case. 

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