3 yLink Limited buys stationery goods from manufacturers and then sells the goods wholesale from its warehouse to retailers typically on 30 days trade credit. The normal mark up above cost is about 10 percent. During the year the company expanded the range of goods it sold by buying Gamegroup Ltd which sold board games. It acquired the assets and liabilities of Gamegroup (rather than Gamegroup the company) and integrated the data from Gamegroup's systems into those of yLink. Unfortunately, the integration did not go smoothly and some sales are not being accurately processed with goods going to the wrong location and an increased number of returns having to be processed. The aged sales ledger report shows a deterioration in the collection of monies due to the company. There is also an increased level of credit notes issued by way of refunds. You are carrying out the audit of the statutory financial statements of yLink. Required 1. What is an aged sales ledger report and how might the external auditor use the data it contains? (3 marks) 2. What are the implications for your audit of the difficulties in sales processing caused by the systems integration problems? (4 marks) 3. Explain the process whereby an auditor conducts a positive debtors circularisation. (8 marks) 4. What procedural steps would you expect yLink to have adopted in migrating the Gamegroup general ledger onto the yLink systems platform? (5 marks) 5. What issues and tests will you seek to address and plan to perform to confirm that yLink has properly calculated the provision for reducing the cost of inventory held at the year end down to expected net realisable value? Note: you are not required to address the testing of cost, you may assume for the purpose of your answer that cost has been properly calculated. (5 marks) Total 25 marks