(a) Explain the meaning of the term 'pervasive' in the context of the independent auditor's report (3 marks) Explain the two types of modified opinions when there is an issue which is considered material and pervasive (2 marks) You are an audit manager in Consway & Co and you are nearing completion of the audit of Festep Co Enterprises. The audit senior has extracts below from the draft auditor's report for Festep Co Enterprises. 1. Our responsibility is to express an opinion on all pages of the financial statements based on our audit 2. We concluded our audit in accordance with most of the International Standards on Auditing 3. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain maximum assurance as to whether the financial statements are free from all misstatements whether caused by fraud or error 4. We have a responsibility to prevent and detect fraud and error and to prepare the financial statements in accordance with International Financial Reporting Standards 5. An audit involves performing procedure to obtain evidence about the amounts and disclosures in the financial statements. The procedure selected depend on the availability and experience of audit team members 6. We consider internal controls relevant to the entity; and express an opinion on the effectiveness of these internal controls 7. We did not evaluate the overall presentation of the financial statements, as this is management responsibility. 8. We considered the reasonableness of any new accounting estimates made by management. We did not review the appropriateness of accounting policies as these are the same as last year 9. In order to confirm raw material inventory quantities, we relied on the work undertaken by an independent experts. Required: (b) Describe the factors to consider and steps Consway & Co should take, prior to placing reliance on the work of the independent expert, in order to confirm raw material quantities. (5 marks) (c) For the above report extracts, identify and explain SIX elements of this report which require amendments. (15 marks) Note: Redraft report extracts are not required. (Total 25 marks)