a The factors that determine the amount and level of audit evidence for the current assets and liabilities include the:
i. Effectiveness of internal control measures put in place;
ii. Materiality of the items of current assets and liabilities;
iii. Effectiveness of the accounting system;
iv. Reliability of the enterprise staff and management;
v. Consistency of the evidence;
vi. Sampling method applied to obtain audit evidence;
vii. Professional judgement by the auditor on evidence gathering
process; and
viii. The level of risk that the financial statements might not give a true and fair view.

b. The procedures that will be applied to generate audit evidence in the following scenarios are as follows:
i) Trade receivables account
Accuracy of the figures in the accounts can be confirmed by obtaining confirmation from external/third parties. Direct confirmation involves asking customers to provide written
confirmation directly to the auditors of their account balances with the client entity.
ii) Purchase of plant and machinery in the year

• Obtain/prepare a schedule for the additions.
• Check the authorisation of the expenditusre to purchase these additions.
• Confirm that total additions reconcile with the movement between the opening and closing balances in the notes to the financial
  statements.
• Inspect a purchase invoice or other documents as evidence of the cost of any additions and confirm that the documents are in the company‟s name.
• Verify the existence of the acquired plant and machinery by means of physical inspection, where applicable.
• Check that entries in the accounting records are correct, confirming the allocation of total expenditure between capital and revenue expenditure.

iii) Change in performance
This can be ascertained to be in line with expectation by comparing budgets with actual performance in the period. Analytical review procedures will identify unusual variation between the budget and actual.
This could help management to identify areas where the variations occurred and assist in necessary investigation to know the reason(s) for such variations, whether expected or abnormal.
iv) Accuracy of the total receivable figures in the statement of financial position The auditors need to be satisfied that the presentation and disclosure of the total trade receivables is correct. This can be done by:

• Agreeing the list of receivable ledger balances (on which he based his substantive procedures) with the financial statements figure;
• Correct disclosure and classification of receivables in the financial statements;
• Conduct cut-off tests between credit sales procedures and trade receivables; and

 Checking that due provision is made for doubtful receivables.
v) Contingent liability as to legal fees

• Ascertain the approach taken by the client‟s management to identify contingencies on legal fees.
• Review minutes of the board meeting where such matter was discussed and approved.
• Review the client‟s correspondence with lawyers and invoices for legal services.
• Consider direct confirmation from lawyers of matters handled on behalf of the entity under audit.

c. Procedures for disposal of plant and machinery include:
i. Obtaining or preparing a schedule of disposals for the period;
ii. Checking or the authorisation of the disposals;
iii. Confirming cost and the accumulated depreciation figures of the items have been removed from the accounting records;
iv. Verifying the calculation of the figure for the gain or loss on disposal and verify that this figure has been correctly recorded in the ledger;
and
v. Discussing with management, the possibility of unrecorded disposals of assets.

d. The requirements of ISA 505 concerning the external confirmation requests of current assets and liabilities
The auditor should maintain control over the confirmation process in the:
i. Identification of the member or members of the audit team responsible for controlling the external confirmation process, the resources assigned and the timing of the related procedures;
ii. Selection of items for which external confirmations will be requested;
iii. Design and preparation of the confirmation requests;
iv. Communication of the confirmation requests to the appropriate confirming party;
v. Consideration of the results (responses, non-responses and exceptions) of confirmation requests; and
vi. Evaluation of the evidence obtained from the confirmation requests.