88 Annual Report 2021 Report on the Audit of the Financial Statements (Cont’d) Key Audit Matters (Cont’d) Key audit matter How the matter was addressed in the audit Revenue from property development activities (Cont’d) Significant judgement is required in the estimation of total property development costs. Where the actual total property development costs is different from the estimated total property development costs, such difference will impact the property development profits recognised. Refer to “Significant accounting estimates and judgements” in Note 2(c)(i) to the financial statements. Our audit procedures included, among others: (Cont’d) • Performed site visits for individually significant projects to arrive at an overall assessment as to whether information provided by management is reasonable. • Reviewed management prepared budgets for property development projects and ensured that budgets are appropriate and reflected cost incurred and cost to complete, current cost of operations and computation of profit recognition. • Challenged management assumptions used in the preparation of the respective budgets, and performed a retrospective review to establish the reliability of management-prepared budgets and considered the implication of any changes in assumption used in the budgets. • Performed test of details on actual development costs incurred during the financial year as to whether the development costs recorded are valid and in the correct accounting period. • Verified the gross development value by reviewing the sale and purchase agreement entered into between the purchasers and the Group. • Checked the mathematical accuracy of the revenue and profit based on percentage of completion calculations and considered the implications of any changes in estimate. We have determined that there are no key audit matters in the audit of the separate financial statements of the Company to be communicated in our auditors’ report. Independent Auditors’ Report TO THE MEMBERS OF MKH BERHAD (Incorporated in Malaysia)
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