Given a large amount of expenditure on refitting existing aircraft, an auditor is concerned that property, plant, and equipment (PPE) may be overstated in the financial statements. Which TWO of the following statements represent valid responses to address this specific audit risk? 1. Perform a proof in total calculation of the depreciation charge for the year and investigate differences. 2. Review minutes of training meetings to determine if pilots have been trained to use the specialist equipment. 3. Obtain a breakdown of the capitalized costs and agree a sample of items to invoices to determine the nature of the expenditure. 4. Inspect management's review of whether the value of the aircraft has been impaired.

When an audit is continuously or periodically undertaken within an organization to check internal financial controls, operational efficiency, and irregularities, it is classified as which type of audit?

A company generates a significant portion of its revenue from a single contract with the police force, which is now due for renewal. Which TWO of the following are valid auditor responses to assess this situation? 1. Review contracts with other customers to check for break clauses. 2. Contact the customer directly to request confirmation on whether the contract will be renewed. 3. Review the short-term and long-term funding facilities available to the company. 4. Consider whether the financial statements contain appropriate disclosures in relation to this material matter.