Holiday Holdings Ltd (HH) is a group of companies in the leisure industry.

Its subsidiaries include Lyndon Hotel Ltd and the Park Leisure Complex Ltd.

Because of pressure on audit fees, the auditors of HH are anxious to reduce the time taken to carry out their substantive audit testing during the 19X9 audit. One means of doing this which they wish to use is that of analytical review. The audit senior, Susan Grey, has collected data on two areas which she considers suitable for analytical review: turnover for room lettings at the hotel, and wages and salaries at the leisure complex...............

QUESTIONS FOR DISCUSSION
1. Using the information given in the documents above:

(a) Estimate the expected level of (i) income from room lettings;
(ii) wages and salaries, for Lyndon and Park for the year ended 30 April 19X9.

(b) Compare your results with the actual reported figures and suggest reasons for the difference.

(c) What are the advantages and drawbacks of an analytical review approach to substantive testing?