The balance sheets of Carnbee Limited, a trading company, at 31 August 2020 and 31 August 2019 together with profit and loss account extracts are as follows:

You are planning your audit approach for the year ended 31 August 2020. What areas would you regard as being of low risk and of high risk? Are there any areas where you might be inclined to spend restricted or no systems work?

Transcribed Image Text:

Fixed assets: cost Accumulated depreciation Inventories Trade receivables Petty cash Net current liabilities/assets Net assets 2020 500 000 150 000 350 000 150 000 100.000 160 000 150 000 500 310 500 500 250 500 70 500 420 500 2019 500 000 100 000 400 000 80 500 480 500