Azure sells inclusive tours (i.e. international flights, hotel accommodation and meals) to two million customers. All hotels are independently owned and operated. The company employs 5,000 people and uses 11 leased aircraft. Azure has a representative office at each of 13 holiday locations. Your firm has been invited to tender for the audit of Azure for the year ended 31 December 2020. As the prospective audit engagement manager, you have been asked to identify the principal audit risks and other planning issues, including audit strategy, to be presented as part of your firm's written submission. The invitation to tender indicates that written submissions will be used as a means of shortlisting for the presentation stage. You have obtained the following information from Azure's Annual Report 2019: 1. Holidays are sold through Azure's retail travel agency, IsoTours, which has 29 outlets (2018: 31). Direct sales through call centers are the fastest growing distribution method and Internet bookings are now offered. 2. The internal financial control system includes: a. Divisional planning and budgeting systems and regular Board reviews of actual results compared to budget and prior year comparatives; and b. An internal audit function and a review of internal audit reports by the Audit Committee. Notes: (i) Turnover represents gross revenue receivable from inclusive tours and travel agency commissions. Revenues and expenses relating to inclusive tours are taken to the Income Statement on holiday departure. (ii) Revenue received in advance included in current liabilities amounts to $69.9 million (2018: \$61.4 million). (iii) Debt will be redeemed at its principal amount on 7 January 2024 unless it is converted at the option of the debt holder any time before 31 December 2020. (iv) Annual commitments under non-cancellable operating leases are as follows ( $m) : )iscussion Explain the audit planning issues which should be included in the written submission as requested by Azure. Azure sells inclusive tours (i.e. international flights, hotel accommodation and meals) to two million customers. All hotels are independently owned and operated. The company employs 5,000 people and uses 11 leased aircraft. Azure has a representative office at each of 13 holiday locations. Your firm has been invited to tender for the audit of Azure for the year ended 31 December 2020. As the prospective audit engagement manager, you have been asked to identify the principal audit risks and other planning issues, including audit strategy, to be presented as part of your firm's written submission. The invitation to tender indicates that written submissions will be used as a means of shortlisting for the presentation stage. You have obtained the following information from Azure's Annual Report 2019: 1. Holidays are sold through Azure's retail travel agency, IsoTours, which has 29 outlets (2018: 31). Direct sales through call centers are the fastest growing distribution method and Internet bookings are now offered. 2. The internal financial control system includes: a. Divisional planning and budgeting systems and regular Board reviews of actual results compared to budget and prior year comparatives; and b. An internal audit function and a review of internal audit reports by the Audit Committee. Notes: (i) Turnover represents gross revenue receivable from inclusive tours and travel agency commissions. Revenues and expenses relating to inclusive tours are taken to the Income Statement on holiday departure. (ii) Revenue received in advance included in current liabilities amounts to $69.9 million (2018: \$61.4 million). (iii) Debt will be redeemed at its principal amount on 7 January 2024 unless it is converted at the option of the debt holder any time before 31 December 2020. (iv) Annual commitments under non-cancellable operating leases are as follows ( $m) : )iscussion Explain the audit planning issues which should be included in the written submission as requested by Azure