In the tour of the client’s operations, the auditor noted two machines were not operating in the client’s factory. This meant that production was 25 per cent lower than normal. The factory manager informed the auditor that this was because the machines were being serviced; however, the auditor saw no evidence of this. How would this affect the audit plan?

(a) It would have no effect. The factory manager’s explanation should be accepted.

(b) It would increase the amount of audit work on plant and machinery.

(c) It would be necessary to perform a more thorough review of sales for the year and the sales forecasts.

(d) It would be necessary to perform more work on stock to check for obsolescence.

Choose the correct answer.