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

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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!

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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

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