* A. Your firm has been the auditor of James Products, a listed company, for a number of years. The engagement partner has asked you to describe the matters you would consider when planning the audit for the year ended 31 January 2020. During a recent visit to the company, you obtained the following information: * a. The management accounts for the 10 months to 30 November 2019 show revenue of RM260 million and profit before tax of RM8 million. Assume that sales and profits accrue evenly throughout the year. In the year ended 31 January 2019 James Products had sales of RM220 million and profit before tax of RM16 million. * b. The company installed a new computerized inventory control system which has operated from 1 June 2019. As the inventory control system records inventory movements and current inventory quantities, the company is proposing: * To use the inventory quantities on the computer to value the inventory at the year-end * Not to carry out an inventory count at the year-end * c. You are aware there have been reliability problems with the company's products, which have resulted in legal claims being brought against the company by customers, and customers refusing to pay for the products. * d. The sales increase in the 10 months to 30 November 2019 over the previous year has been achieved by attracting new customers and by offering extended credit. The new credit arrangements allow customers three months credit before their debt becomes overdue, rather than the one month credit period allowed previously. As a result of this change, trade receivables age has increased from 1.6 months to 4.1 months. * e. The financial director and purchasing manager were dismissed on 15 August 2019. A replacement purchasing manager has been appointed but it is not expected that a new financial director will be appointed before the year end of 31 January 2020. The chief accountant will be responsible for preparing the financial statements for audit. Required: * i. Describe the reasons why it is important that auditors should plan their audit work. ii.Describe the matters you will consider in planning the audit and the further action you will take concerning the information you obtained during your recent visit to the company