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(a) Audit procedures regarding non-depreciation of buildings

– Review audit file to ensure that sufficient appropriate audit evidence has been collected in respect of this matter.
– Ensure that GAAP does apply to the specific buildings owned by Galartha Co and that a departure from GAAP is not needed in order for the financial statements to show a true and fair view.
– Meet with the directors to confirm their reasons for not depreciating buildings.
– Warn the directors that in your opinion buildings should be depreciated and that failure to provide depreciation will result in a modified audit report.
– Determine the effect of the disagreement on the audit report in terms of the modified opinion being material or of pervasive materiality to the financial statements.
– Draft the appropriate sections of the modified audit report.
– Obtain a letter of representation from the directors confirming that depreciation will not be charged on buildings.