7 PURPOSE OF AN AUDIT Chaos Ltd. is a manufacturer of mobile phones. The domestic market for electronic goods is currently not doing well, and therefore many entities in this business are switching to export. As per the audited financial statements for the year ended December 31, 2018, the entity had net losses of 2 million. At December 31, 2018, its current assets aggregate to 20 million and the current liabilities aggregate to 25 million. Due to expected favourable changes in the government policies for the electronics industry, the entity is projecting profits in the coming years. 4 International Auditing Cases Furthermore, the shareholders of the entity have arranged alternative additional sources of finance for its expansion plans and to support its working needs in the next 12 months. Consequences for the audit