(a) You are a manager in one of the assurance departments of your audit firm, Rashid & Co, a large firm of Chartered Certified Accountants. You are currently assigned to a due diligence review engagement for a new audit client, Kotoka Co, who operates in the airline business. Kotoka Co. intends to acquire Sylvester Co that manufactures aircrafts in Europe and has an assembling plant in Africa.

Required:

Discuss the matters that you should consider before accepting to perform the Due Diligence Review for Kotoka Co. (6 marks)

Taking into consideration all relevant issues, discuss the matters that would inform your ability to perform a good due diligence review on Sylvester Co that would help Kotoka Co to make a good investment decision. (10 marks)

Compare the scope of a due diligence review with a financial statement audit.(4 marks)