(b) You are the manager responsible for the audit of Poppy Co, a manufacturing c

(b) You are the manager responsible for the audit of Poppy Co, a manufacturing company with a year ended

31 October 2008. In the last year, several investment properties have been purchased to utilise surplus funds

and to provide rental income. The properties have been revalued at the year end in accordance with IAS 40

Investment Property, they are recognised on the statement of financial position at a fair value of $8 million, and

the total assets of Poppy Co are $160 million at 31 October 2008. An external valuer has been used to provide

the fair value for each property.

Required:

(i) Recommend the enquiries to be made in respect of the external valuer, before placing any reliance on their

work, and explain the reason for the enquiries; (7 marks)

(b) (i) Enquiries in respect of the external valuerEnquiries would need to be made for two main reasons, firstly to determine the competence, and secondly the objectivityof the valuer. ISA 620 Using the Work of an Expert contains guidance in this area.Com